Correlation Between Bitcoin Cash and FTX Token
Can any of the company-specific risk be diversified away by investing in both Bitcoin Cash and FTX Token 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 FTX Token into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin Cash and FTX Token, you can compare the effects of market volatilities on Bitcoin Cash and FTX Token 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 FTX Token. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin Cash and FTX Token.
Diversification Opportunities for Bitcoin Cash and FTX Token
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bitcoin and FTX is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin Cash and FTX Token in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTX Token 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 FTX Token. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FTX Token has no effect on the direction of Bitcoin Cash i.e., Bitcoin Cash and FTX Token go up and down completely randomly.
Pair Corralation between Bitcoin Cash and FTX Token
Assuming the 90 days trading horizon Bitcoin Cash is expected to generate 0.94 times more return on investment than FTX Token. However, Bitcoin Cash is 1.07 times less risky than FTX Token. It trades about 0.14 of its potential returns per unit of risk. FTX Token is currently generating about -0.25 per unit of risk. If you would invest 41,441 in Bitcoin Cash on January 20, 2024 and sell it today you would earn a total of 7,101 from holding Bitcoin Cash or generate 17.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bitcoin Cash vs. FTX Token
Performance |
| Timeline |
| Bitcoin Cash |
| FTX Token |
Bitcoin Cash and FTX Token Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitcoin Cash and FTX Token
The main advantage of trading using opposite Bitcoin Cash and FTX Token positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin Cash position performs unexpectedly, FTX Token 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 FTX Token will offset losses from the drop in FTX Token's long position.| Bitcoin Cash vs. Bitcoin | Bitcoin Cash vs. Dogecoin | Bitcoin Cash vs. Litecoin | Bitcoin Cash vs. Ethereum Classic |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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