Correlation Between Bitcoin Gold and Decred
Can any of the company-specific risk be diversified away by investing in both Bitcoin Gold and Decred 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 Decred into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin Gold and Decred, you can compare the effects of market volatilities on Bitcoin Gold and Decred 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 Decred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin Gold and Decred.
Diversification Opportunities for Bitcoin Gold and Decred
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bitcoin and Decred is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin Gold and Decred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Decred 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 Decred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Decred has no effect on the direction of Bitcoin Gold i.e., Bitcoin Gold and Decred go up and down completely randomly.
Pair Corralation between Bitcoin Gold and Decred
Assuming the 90 days trading horizon Bitcoin Gold is expected to generate 0.94 times more return on investment than Decred. However, Bitcoin Gold is 1.06 times less risky than Decred. It trades about 0.15 of its potential returns per unit of risk. Decred is currently generating about 0.13 per unit of risk. If you would invest 2,074 in Bitcoin Gold on January 21, 2024 and sell it today you would earn a total of 1,252 from holding Bitcoin Gold or generate 60.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bitcoin Gold vs. Decred
Performance |
| Timeline |
| Bitcoin Gold |
| Decred |
Bitcoin Gold and Decred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitcoin Gold and Decred
The main advantage of trading using opposite Bitcoin Gold and Decred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin Gold position performs unexpectedly, Decred 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 Decred will offset losses from the drop in Decred's long position.| Bitcoin Gold vs. Bitcoin Cash | Bitcoin Gold vs. Bitcoin SV | Bitcoin Gold vs. Staked Ether | Bitcoin Gold vs. XCAD Network |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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