This module allows you to analyze existing cross correlation between Coinbase Bitcoin USD and LiveCoin NEM USD. You can compare the effects of market volatilities on Coinbase Bitcoin and LiveCoin NEM 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 Coinbase Bitcoin with a short position of LiveCoin NEM. See also your portfolio center. Please also check ongoing floating volatility patterns of Coinbase Bitcoin and LiveCoin NEM.
Assuming 30 trading days horizon, Coinbase Bitcoin USD is expected to generate 0.64 times more return on investment than LiveCoin NEM. However, Coinbase Bitcoin USD is 1.56 times less risky than LiveCoin NEM. It trades about 0.1 of its potential returns per unit of risk. LiveCoin NEM USD is currently generating about -0.01 per unit of risk. If you would invest 673,048 in Coinbase Bitcoin USD on June 19, 2018 and sell it today you would earn a total of 60,052 from holding Coinbase Bitcoin USD or generate 8.92% return on investment over 30 days.
Pair Corralation between Coinbase Bitcoin and LiveCoin NEM
Overlapping area represents the amount of risk that can be diversified away by holding Coinbase Bitcoin USD and LiveCoin NEM USD in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on LiveCoin NEM USD and Coinbase Bitcoin 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 Coinbase Bitcoin USD are associated (or correlated) with LiveCoin NEM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LiveCoin NEM USD has no effect on the direction of Coinbase Bitcoin i.e. Coinbase Bitcoin and LiveCoin NEM go up and down completely randomly.
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