Correlation Between Bitcoin and VTC

Can any of the company-specific risk be diversified away by investing in both Bitcoin and VTC 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 and VTC into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bitcoin and VTC, you can compare the effects of market volatilities on Bitcoin and VTC 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 with a short position of VTC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin and VTC.

Diversification Opportunities for Bitcoin and VTC

-0.02

Correlation Coefficient

Bitcoin  VTC

Good diversification

The 3 months correlation between Bitcoin and VTC is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and VTC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VTC and Bitcoin 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 are associated (or correlated) with VTC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VTC has no effect on the direction of Bitcoin i.e., Bitcoin and VTC go up and down completely randomly.

Pair Corralation between Bitcoin and VTC

Assuming the 90 days trading horizon Bitcoin is expected to generate 0.47 times more return on investment than VTC. However, Bitcoin is 2.14 times less risky than VTC. It trades about 0.1 of its potential returns per unit of risk. VTC is currently generating about -0.07 per unit of risk. If you would invest  10,481,400  in Bitcoin on May 9, 2025 and sell it today you would earn a total of  1,022,900  from holding Bitcoin or generate 9.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Bitcoin  vs.  VTC

Bitcoin

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Bitcoin are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Bitcoin may actually be approaching a critical reversion point that can send shares even higher in September 2025.

VTC

Risk-Adjusted Performance

Weakest

Over the last 90 days VTC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in September 2025. The latest tumult may also be a sign of longer-term up-swing for VTC shareholders.

Pair Trading with Bitcoin and VTC

The main advantage of trading using opposite Bitcoin and VTC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin position performs unexpectedly, VTC 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 VTC will offset losses from the drop in VTC's long position.

The idea behind Bitcoin and VTC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..