Correlation Between Bitcoin Gold and Bitcoin SV
Can any of the company-specific risk be diversified away by investing in both Bitcoin Gold and Bitcoin SV at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Bitcoin Gold and Bitcoin SV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin Gold and Bitcoin SV, you can compare the effects of market volatilities on Bitcoin Gold and Bitcoin SV 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 Bitcoin Gold with a short position of Bitcoin SV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin Gold and Bitcoin SV.
Diversification Opportunities for Bitcoin Gold and Bitcoin SV
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bitcoin and Bitcoin is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin Gold and Bitcoin SV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitcoin SV and Bitcoin Gold 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 Bitcoin Gold are associated (or correlated) with Bitcoin SV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitcoin SV has no effect on the direction of Bitcoin Gold i.e., Bitcoin Gold and Bitcoin SV go up and down completely randomly.
Pair Corralation between Bitcoin Gold and Bitcoin SV
Assuming the 90 days trading horizon Bitcoin Gold is expected to under-perform the Bitcoin SV. But the crypto coin apears to be less risky and, when comparing its historical volatility, Bitcoin Gold is 1.36 times less risky than Bitcoin SV. The crypto coin trades about -0.22 of its potential returns per unit of risk. The Bitcoin SV is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 8,959 in Bitcoin SV on January 24, 2024 and sell it today you would lose (1,804) from holding Bitcoin SV or give up 20.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bitcoin Gold vs. Bitcoin SV
Performance |
| Timeline |
| Bitcoin Gold |
| Bitcoin SV |
Bitcoin Gold and Bitcoin SV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitcoin Gold and Bitcoin SV
The main advantage of trading using opposite Bitcoin Gold and Bitcoin SV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin Gold position performs unexpectedly, Bitcoin SV can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Bitcoin SV will offset losses from the drop in Bitcoin SV's long position.| Bitcoin Gold vs. Bitcoin | Bitcoin Gold vs. Dogecoin | Bitcoin Gold vs. Bitcoin Cash | Bitcoin Gold vs. Litecoin |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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