Correlation Between Crypto and Blockchain Industries

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

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

Diversification Opportunities for Crypto and Blockchain Industries

0.02

Correlation Coefficient

Crypto  Blockchain Industries

Significant diversification

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

Pair Corralation between Crypto and Blockchain Industries

Given the investment horizon of 90 days Crypto Co is expected to under-perform the Blockchain Industries. But the pink sheet apears to be less risky and, when comparing its historical volatility, Crypto Co is 1.61 times less risky than Blockchain Industries. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Blockchain Industries is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  1.19  in Blockchain Industries on April 25, 2025 and sell it today you would lose (0.41) from holding Blockchain Industries or give up 34.45% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Crypto Co  vs.  Blockchain Industries

Crypto

Risk-Adjusted Performance

Very Weak

Over the last 90 days Crypto Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental indicators remain fairly stable which may send shares a bit higher in August 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Blockchain Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blockchain Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Blockchain Industries is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Crypto and Blockchain Industries

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

The idea behind Crypto Co and Blockchain Industries 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.