This module allows you to analyze existing cross correlation between Kraken Bitcoin USD and itBit Bitcoin USD. You can compare the effects of market volatilities on Kraken Bitcoin and itBit 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 Kraken Bitcoin with a short position of itBit Bitcoin. See also your portfolio center. Please also check ongoing floating volatility patterns of Kraken Bitcoin and itBit Bitcoin.
Assuming 30 trading days horizon, Kraken Bitcoin is expected to generate 1.0 times less return on investment than itBit Bitcoin. But when comparing it to its historical volatility, Kraken Bitcoin USD is 1.03 times less risky than itBit Bitcoin. It trades about 0.1 of its potential returns per unit of risk. itBit Bitcoin USD is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 674,992 in itBit Bitcoin USD on June 19, 2018 and sell it today you would earn a total of 57,237 from holding itBit Bitcoin USD or generate 8.48% return on investment over 30 days.
Pair Corralation between Kraken Bitcoin and itBit Bitcoin
Overlapping area represents the amount of risk that can be diversified away by holding Kraken Bitcoin USD and itBit Bitcoin USD in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on itBit Bitcoin USD and Kraken 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 Kraken Bitcoin USD are associated (or correlated) with itBit Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of itBit Bitcoin USD has no effect on the direction of Kraken Bitcoin i.e. Kraken Bitcoin and itBit Bitcoin go up and down completely randomly.
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