Correlation Between Bitcoin Gold and Quant
Can any of the company-specific risk be diversified away by investing in both Bitcoin Gold and Quant 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 Quant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin Gold and Quant, you can compare the effects of market volatilities on Bitcoin Gold and Quant 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 Quant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin Gold and Quant.
Diversification Opportunities for Bitcoin Gold and Quant
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bitcoin and Quant is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin Gold and Quant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quant 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 Quant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quant has no effect on the direction of Bitcoin Gold i.e., Bitcoin Gold and Quant go up and down completely randomly.
Pair Corralation between Bitcoin Gold and Quant
Assuming the 90 days trading horizon Bitcoin Gold is expected to under-perform the Quant. But the crypto coin apears to be less risky and, when comparing its historical volatility, Bitcoin Gold is 1.03 times less risky than Quant. The crypto coin trades about -0.16 of its potential returns per unit of risk. The Quant is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 12,410 in Quant on January 20, 2024 and sell it today you would lose (1,563) from holding Quant or give up 12.59% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Bitcoin Gold vs. Quant
Performance |
Timeline |
Bitcoin Gold |
Quant |
Bitcoin Gold and Quant Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bitcoin Gold and Quant
The main advantage of trading using opposite Bitcoin Gold and Quant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin Gold position performs unexpectedly, Quant 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 Quant will offset losses from the drop in Quant's long position.Bitcoin Gold vs. Bitcoin | Bitcoin Gold vs. Dogecoin | Bitcoin Gold vs. Bitcoin Cash | Bitcoin Gold vs. Litecoin |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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