Correlation Between Bitcoin Cash and GRS
Can any of the company-specific risk be diversified away by investing in both Bitcoin Cash and GRS 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 Cash and GRS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin Cash and GRS, you can compare the effects of market volatilities on Bitcoin Cash and GRS 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 Cash with a short position of GRS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin Cash and GRS.
Diversification Opportunities for Bitcoin Cash and GRS
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bitcoin and GRS is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin Cash and GRS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRS and Bitcoin Cash 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 Cash are associated (or correlated) with GRS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRS has no effect on the direction of Bitcoin Cash i.e., Bitcoin Cash and GRS go up and down completely randomly.
Pair Corralation between Bitcoin Cash and GRS
Assuming the 90 days trading horizon Bitcoin Cash is expected to generate 0.76 times more return on investment than GRS. However, Bitcoin Cash is 1.32 times less risky than GRS. It trades about 0.03 of its potential returns per unit of risk. GRS is currently generating about 0.0 per unit of risk. If you would invest 48,398 in Bitcoin Cash on August 26, 2024 and sell it today you would earn a total of 2,649 from holding Bitcoin Cash or generate 5.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bitcoin Cash vs. GRS
Performance |
| Timeline |
| Bitcoin Cash |
| GRS |
Bitcoin Cash and GRS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitcoin Cash and GRS
The main advantage of trading using opposite Bitcoin Cash and GRS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin Cash position performs unexpectedly, GRS 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 GRS will offset losses from the drop in GRS's long position.| Bitcoin Cash vs. Bitcoin Gold | Bitcoin Cash vs. Bitcoin SV | Bitcoin Cash vs. Staked Ether | Bitcoin Cash vs. EigenLayer |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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