This module allows you to analyze existing cross correlation between Poloniex Bitcoin USD and Gemini Bitcoin USD. You can compare the effects of market volatilities on Poloniex Bitcoin and Gemini 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 Poloniex Bitcoin with a short position of Gemini Bitcoin. See also your portfolio center. Please also check ongoing floating volatility patterns of Poloniex Bitcoin and Gemini Bitcoin.
Assuming 30 trading days horizon, Poloniex Bitcoin USD is expected to generate 1.06 times more return on investment than Gemini Bitcoin. However, Poloniex Bitcoin is 1.06 times more volatile than Gemini Bitcoin USD. It trades about -0.02 of its potential returns per unit of risk. Gemini Bitcoin USD is currently generating about -0.02 per unit of risk. If you would invest 652,028 in Poloniex Bitcoin USD on June 15, 2018 and sell it today you would lose (17,656) from holding Poloniex Bitcoin USD or give up 2.71% of portfolio value over 30 days.
Pair Corralation between Poloniex Bitcoin and Gemini Bitcoin
Overlapping area represents the amount of risk that can be diversified away by holding Poloniex Bitcoin USD and Gemini Bitcoin USD in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Gemini Bitcoin USD and Poloniex 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 Poloniex Bitcoin USD are associated (or correlated) with Gemini Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gemini Bitcoin USD has no effect on the direction of Poloniex Bitcoin i.e. Poloniex Bitcoin and Gemini Bitcoin go up and down completely randomly.
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