Correlation Between Bitcoin Gold and Zilliqa

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

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

Diversification Opportunities for Bitcoin Gold and Zilliqa

0.93

Correlation Coefficient

Bitcoin Gold  Zilliqa

Almost no diversification

The 3 months correlation between Bitcoin and Zilliqa is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin Gold and Zilliqa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zilliqa 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 Zilliqa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zilliqa has no effect on the direction of Bitcoin Gold i.e., Bitcoin Gold and Zilliqa go up and down completely randomly.

Pair Corralation between Bitcoin Gold and Zilliqa

Assuming the 90 days trading horizon Bitcoin Gold is expected to generate 0.72 times more return on investment than Zilliqa. However, Bitcoin Gold is 1.38 times less risky than Zilliqa. It trades about -0.26 of its potential returns per unit of risk. Zilliqa is currently generating about -0.19 per unit of risk. If you would invest  4,565  in Bitcoin Gold on January 26, 2024 and sell it today you would lose (1,131) from holding Bitcoin Gold or give up 24.78% 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.  Zilliqa

Bitcoin Gold

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bitcoin Gold are ranked lower than 10 (%) 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.

Zilliqa

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Zilliqa are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady essential indicators, Zilliqa exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bitcoin Gold and Zilliqa

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

The idea behind Bitcoin Gold and Zilliqa 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.