Correlation Between Bitcoin SV and Horizen

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Can any of the company-specific risk be diversified away by investing in both Bitcoin SV and Horizen 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 SV and Horizen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin SV and Horizen, you can compare the effects of market volatilities on Bitcoin SV and Horizen 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 SV with a short position of Horizen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin SV and Horizen.

Diversification Opportunities for Bitcoin SV and Horizen

0.73
  Correlation Coefficient

Poor diversification

The 3 months correlation between Bitcoin and Horizen is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin SV and Horizen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizen and Bitcoin SV 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 SV are associated (or correlated) with Horizen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizen has no effect on the direction of Bitcoin SV i.e., Bitcoin SV and Horizen go up and down completely randomly.

Pair Corralation between Bitcoin SV and Horizen

Assuming the 90 days trading horizon Bitcoin SV is expected to generate 2.2 times less return on investment than Horizen. But when comparing it to its historical volatility, Bitcoin SV is 2.41 times less risky than Horizen. It trades about 0.41 of its potential returns per unit of risk. Horizen is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest  731.00  in Horizen on September 1, 2024 and sell it today you would earn a total of  794.00  from holding Horizen or generate 108.62% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Bitcoin SV  vs.  Horizen

 Performance 
       Timeline  
Bitcoin SV 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Bitcoin SV are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Bitcoin SV exhibited solid returns over the last few months and may actually be approaching a breakup point.
Horizen 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Horizen are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Horizen exhibited solid returns over the last few months and may actually be approaching a breakup point.

Bitcoin SV and Horizen Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bitcoin SV and Horizen

The main advantage of trading using opposite Bitcoin SV and Horizen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin SV position performs unexpectedly, Horizen 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 Horizen will offset losses from the drop in Horizen's long position.
The idea behind Bitcoin SV and Horizen 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.

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