This module allows you to analyze existing cross correlation between itBit Bitcoin USD and LakeBTC Bitcoin USD. You can compare the effects of market volatilities on itBit Bitcoin and LakeBTC 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 itBit Bitcoin with a short position of LakeBTC Bitcoin. See also your portfolio center. Please also check ongoing floating volatility patterns of itBit Bitcoin and LakeBTC Bitcoin.
Assuming 30 trading days horizon, itBit Bitcoin USD is expected to under-perform the LakeBTC Bitcoin. In addition to that, itBit Bitcoin is 1.18 times more volatile than LakeBTC Bitcoin USD. It trades about -0.14 of its total potential returns per unit of risk. LakeBTC Bitcoin USD is currently generating about -0.15 per unit of volatility. If you would invest 804,902 in LakeBTC Bitcoin USD on July 16, 2018 and sell it today you would lose (94,838) from holding LakeBTC Bitcoin USD or give up 11.78% of portfolio value over 30 days.
Pair Corralation between itBit Bitcoin and LakeBTC Bitcoin
Overlapping area represents the amount of risk that can be diversified away by holding itBit Bitcoin USD and LakeBTC Bitcoin USD in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on LakeBTC Bitcoin USD and itBit 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 itBit Bitcoin USD are associated (or correlated) with LakeBTC Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LakeBTC Bitcoin USD has no effect on the direction of itBit Bitcoin i.e. itBit Bitcoin and LakeBTC Bitcoin go up and down completely randomly.
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