Correlation Between Bitcoin Gold and 0x
Can any of the company-specific risk be diversified away by investing in both Bitcoin Gold and 0x 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 0x into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin Gold and 0x, you can compare the effects of market volatilities on Bitcoin Gold and 0x 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 0x. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin Gold and 0x.
Diversification Opportunities for Bitcoin Gold and 0x
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bitcoin and 0x is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin Gold and 0x in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 0x 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 0x. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 0x has no effect on the direction of Bitcoin Gold i.e., Bitcoin Gold and 0x go up and down completely randomly.
Pair Corralation between Bitcoin Gold and 0x
Assuming the 90 days trading horizon Bitcoin Gold is expected to generate 0.63 times more return on investment than 0x. However, Bitcoin Gold is 1.58 times less risky than 0x. It trades about -0.26 of its potential returns per unit of risk. 0x is currently generating about -0.41 per unit of risk. If you would invest 4,565 in Bitcoin Gold on January 26, 2024 and sell it today you would lose (1,131) from holding Bitcoin Gold or give up 24.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bitcoin Gold vs. 0x
Performance |
| Timeline |
| Bitcoin Gold |
| 0x |
Bitcoin Gold and 0x Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitcoin Gold and 0x
The main advantage of trading using opposite Bitcoin Gold and 0x positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin Gold position performs unexpectedly, 0x 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 0x will offset losses from the drop in 0x'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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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