Correlation Between Bitcoin Gold and Monero
Can any of the company-specific risk be diversified away by investing in both Bitcoin Gold and Monero 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 Monero into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin Gold and Monero, you can compare the effects of market volatilities on Bitcoin Gold and Monero 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 Monero. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin Gold and Monero.
Diversification Opportunities for Bitcoin Gold and Monero
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bitcoin and Monero is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin Gold and Monero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monero 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 Monero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monero has no effect on the direction of Bitcoin Gold i.e., Bitcoin Gold and Monero go up and down completely randomly.
Pair Corralation between Bitcoin Gold and Monero
Assuming the 90 days trading horizon Bitcoin Gold is expected to under-perform the Monero. In addition to that, Bitcoin Gold is 1.41 times more volatile than Monero. It trades about -0.14 of its total potential returns per unit of risk. Monero is currently generating about -0.16 per unit of volatility. If you would invest 13,503 in Monero on January 21, 2024 and sell it today you would lose (1,735) from holding Monero or give up 12.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bitcoin Gold vs. Monero
Performance |
| Timeline |
| Bitcoin Gold |
| Monero |
Bitcoin Gold and Monero Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitcoin Gold and Monero
The main advantage of trading using opposite Bitcoin Gold and Monero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin Gold position performs unexpectedly, Monero 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 Monero will offset losses from the drop in Monero's long position.| Bitcoin Gold vs. Bitcoin | Bitcoin Gold vs. Dogecoin | Bitcoin Gold vs. Bitcoin Cash | Bitcoin Gold vs. Litecoin |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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