Correlation Between Bitcoin Cash and Cronos
Can any of the company-specific risk be diversified away by investing in both Bitcoin Cash and Cronos 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 Cash and Cronos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin Cash and Cronos, you can compare the effects of market volatilities on Bitcoin Cash and Cronos 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 Cash with a short position of Cronos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin Cash and Cronos.
Diversification Opportunities for Bitcoin Cash and Cronos
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bitcoin and Cronos is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin Cash and Cronos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cronos and Bitcoin Cash 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 Cash are associated (or correlated) with Cronos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cronos has no effect on the direction of Bitcoin Cash i.e., Bitcoin Cash and Cronos go up and down completely randomly.
Pair Corralation between Bitcoin Cash and Cronos
Assuming the 90 days trading horizon Bitcoin Cash is expected to under-perform the Cronos. In addition to that, Bitcoin Cash is 1.04 times more volatile than Cronos. It trades about -0.34 of its total potential returns per unit of risk. Cronos is currently generating about -0.04 per unit of volatility. If you would invest 14.00 in Cronos on February 4, 2024 and sell it today you would lose (1.00) from holding Cronos or give up 7.14% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Bitcoin Cash vs. Cronos
Performance |
Timeline |
Bitcoin Cash |
Cronos |
Bitcoin Cash and Cronos Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bitcoin Cash and Cronos
The main advantage of trading using opposite Bitcoin Cash and Cronos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin Cash position performs unexpectedly, Cronos 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 Cronos will offset losses from the drop in Cronos' long position.Bitcoin Cash vs. Bitcoin Gold | Bitcoin Cash vs. Bitcoin SV | Bitcoin Cash vs. Staked Ether | Bitcoin Cash vs. XCAD Network |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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