Correlation Between Bitcoin Gold and Dash

Can any of the company-specific risk be diversified away by investing in both Bitcoin Gold and Dash 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 Gold and Dash into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bitcoin Gold and Dash, you can compare the effects of market volatilities on Bitcoin Gold and Dash 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 Gold with a short position of Dash. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin Gold and Dash.

Diversification Opportunities for Bitcoin Gold and Dash

0.91

Correlation Coefficient

Bitcoin Gold  Dash

Almost no diversification

The 3 months correlation between Bitcoin and Dash is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin Gold and Dash in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dash and Bitcoin Gold 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 Gold are associated (or correlated) with Dash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dash has no effect on the direction of Bitcoin Gold i.e., Bitcoin Gold and Dash go up and down completely randomly.

Pair Corralation between Bitcoin Gold and Dash

Assuming the 90 days trading horizon Bitcoin Gold is expected to under-perform the Dash. But the crypto coin apears to be less risky and, when comparing its historical volatility, Bitcoin Gold is 1.01 times less risky than Dash. The crypto coin trades about -0.17 of its potential returns per unit of risk. The Dash is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest  3,571  in Dash on January 20, 2024 and sell it today you would lose (667.00) from holding Dash or give up 18.68% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Bitcoin Gold  vs.  Dash

Bitcoin Gold

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bitcoin Gold are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Bitcoin Gold exhibited solid returns over the last few months and may actually be approaching a breakup point.

Dash

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Dash are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Dash exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bitcoin Gold and Dash

The main advantage of trading using opposite Bitcoin Gold and Dash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin Gold position performs unexpectedly, Dash 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 Dash will offset losses from the drop in Dash's long position.

The idea behind Bitcoin Gold and Dash pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.