Correlation Between Dogecoin and VTC

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

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

Diversification Opportunities for Dogecoin and VTC

0.62

Correlation Coefficient

Dogecoin  VTC

Poor diversification

The 3 months correlation between Dogecoin and VTC is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Dogecoin and VTC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VTC and Dogecoin 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 Dogecoin 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 Dogecoin i.e., Dogecoin and VTC go up and down completely randomly.

Pair Corralation between Dogecoin and VTC

Assuming the 90 days trading horizon Dogecoin is expected to generate 1.6 times more return on investment than VTC. However, Dogecoin is 1.6 times more volatile than VTC. It trades about 0.0 of its potential returns per unit of risk. VTC is currently generating about -0.05 per unit of risk. If you would invest  25.00  in Dogecoin on May 21, 2025 and sell it today you would lose (2.00) from holding Dogecoin or give up 8.0% of portfolio value over 90 days.

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

Dogecoin  vs.  VTC

Dogecoin

Risk-Adjusted Performance

Weak

Over the last 90 days Dogecoin has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Dogecoin is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

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 latest unsteady performance, the Crypto's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for VTC shareholders.

Pair Trading with Dogecoin and VTC

The main advantage of trading using opposite Dogecoin and VTC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dogecoin 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 Dogecoin 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.

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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.