Correlation Between Bitcoin Cash and Near
Can any of the company-specific risk be diversified away by investing in both Bitcoin Cash and Near 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 Near into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin Cash and Near, you can compare the effects of market volatilities on Bitcoin Cash and Near 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 Near. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin Cash and Near.
Diversification Opportunities for Bitcoin Cash and Near
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bitcoin and Near is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin Cash and Near in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Near 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 Near. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Near has no effect on the direction of Bitcoin Cash i.e., Bitcoin Cash and Near go up and down completely randomly.
Pair Corralation between Bitcoin Cash and Near
Assuming the 90 days trading horizon Bitcoin Cash is expected to generate 1.36 times less return on investment than Near. But when comparing it to its historical volatility, Bitcoin Cash is 1.16 times less risky than Near. It trades about 0.34 of its potential returns per unit of risk. Near is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 431.00 in Near on August 30, 2024 and sell it today you would earn a total of 247.00 from holding Near or generate 57.31% 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. Near
Performance |
| Timeline |
| Bitcoin Cash |
| Near |
Bitcoin Cash and Near Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitcoin Cash and Near
The main advantage of trading using opposite Bitcoin Cash and Near positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin Cash position performs unexpectedly, Near 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 Near will offset losses from the drop in Near'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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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