Correlation Between Bitcoin Cash and ICON Project
Can any of the company-specific risk be diversified away by investing in both Bitcoin Cash and ICON Project 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 ICON Project into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin Cash and ICON Project, you can compare the effects of market volatilities on Bitcoin Cash and ICON Project 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 ICON Project. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin Cash and ICON Project.
Diversification Opportunities for Bitcoin Cash and ICON Project
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bitcoin and ICON is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin Cash and ICON Project in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICON Project 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 ICON Project. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICON Project has no effect on the direction of Bitcoin Cash i.e., Bitcoin Cash and ICON Project go up and down completely randomly.
Pair Corralation between Bitcoin Cash and ICON Project
Assuming the 90 days trading horizon Bitcoin Cash is expected to generate 1.87 times more return on investment than ICON Project. However, Bitcoin Cash is 1.87 times more volatile than ICON Project. It trades about 0.27 of its potential returns per unit of risk. ICON Project is currently generating about 0.21 per unit of risk. If you would invest 29,679 in Bitcoin Cash on December 29, 2023 and sell it today you would earn a total of 26,963 from holding Bitcoin Cash or generate 90.85% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Bitcoin Cash vs. ICON Project
Performance |
Timeline |
Bitcoin Cash |
ICON Project |
Bitcoin Cash and ICON Project Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bitcoin Cash and ICON Project
The main advantage of trading using opposite Bitcoin Cash and ICON Project positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin Cash position performs unexpectedly, ICON Project 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 ICON Project will offset losses from the drop in ICON Project's long position.Bitcoin Cash vs. Bitcoin Gold | Bitcoin Cash vs. Bitcoin SV | Bitcoin Cash vs. Staked Ether | Bitcoin Cash vs. XCAD Network |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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