Correlation Between Bitcoin Cash and HEDG
Can any of the company-specific risk be diversified away by investing in both Bitcoin Cash and HEDG 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 HEDG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin Cash and HEDG, you can compare the effects of market volatilities on Bitcoin Cash and HEDG 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 HEDG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin Cash and HEDG.
Diversification Opportunities for Bitcoin Cash and HEDG
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bitcoin and HEDG is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin Cash and HEDG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEDG 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 HEDG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEDG has no effect on the direction of Bitcoin Cash i.e., Bitcoin Cash and HEDG go up and down completely randomly.
Pair Corralation between Bitcoin Cash and HEDG
Assuming the 90 days trading horizon Bitcoin Cash is expected to under-perform the HEDG. But the crypto coin apears to be less risky and, when comparing its historical volatility, Bitcoin Cash is 6.07 times less risky than HEDG. The crypto coin trades about -0.09 of its potential returns per unit of risk. The HEDG is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 4.03 in HEDG on January 27, 2024 and sell it today you would lose (0.37) from holding HEDG or give up 9.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bitcoin Cash vs. HEDG
Performance |
| Timeline |
| Bitcoin Cash |
| HEDG |
Bitcoin Cash and HEDG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitcoin Cash and HEDG
The main advantage of trading using opposite Bitcoin Cash and HEDG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin Cash position performs unexpectedly, HEDG 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 HEDG will offset losses from the drop in HEDG'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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |