This module allows you to analyze existing cross correlation between Bitstamp Ethereum USD and LocalBitcoins Bitcoin USD. You can compare the effects of market volatilities on Bitstamp Ethereum and LocalBitcoins Bitcoin and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Bitstamp Ethereum with a short position of LocalBitcoins Bitcoin. See also your portfolio center. Please also check ongoing floating volatility patterns of Bitstamp Ethereum and LocalBitcoins Bitcoin.
Bitstamp Ethereum USD vs. LocalBitcoins Bitcoin USD
Ethereum on Bitstamp in USD
Market Cap: 48.5 M
Bitcoin on LocalBitcoins in USD
Market Cap: 123.7 M
Assuming 30 trading days horizon, Bitstamp Ethereum USD is expected to under-perform the LocalBitcoins Bitcoin. But the crypto apears to be less risky and, when comparing its historical volatility, Bitstamp Ethereum USD is 4.45 times less risky than LocalBitcoins Bitcoin. The crypto trades about -0.04 of its potential returns per unit of risk. The LocalBitcoins Bitcoin USD is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 935,499 in LocalBitcoins Bitcoin USD on August 24, 2018 and sell it today you would lose (67,458) from holding LocalBitcoins Bitcoin USD or give up 7.21% of portfolio value over 30 days.
Pair Corralation between Bitstamp Ethereum and LocalBitcoins Bitcoin
Overlapping area represents the amount of risk that can be diversified away by holding Bitstamp Ethereum USD and LocalBitcoins Bitcoin USD in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on LocalBitcoins Bitcoin USD and Bitstamp Ethereum is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Bitstamp Ethereum USD are associated (or correlated) with LocalBitcoins Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LocalBitcoins Bitcoin USD has no effect on the direction of Bitstamp Ethereum i.e. Bitstamp Ethereum and LocalBitcoins Bitcoin go up and down completely randomly.
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