Correlation Between Bitcoin Gold and ZEL
Can any of the company-specific risk be diversified away by investing in both Bitcoin Gold and ZEL 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 Gold and ZEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin Gold and ZEL, you can compare the effects of market volatilities on Bitcoin Gold and ZEL 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 Gold with a short position of ZEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin Gold and ZEL.
Diversification Opportunities for Bitcoin Gold and ZEL
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bitcoin and ZEL is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin Gold and ZEL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZEL and Bitcoin Gold 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 Gold are associated (or correlated) with ZEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZEL has no effect on the direction of Bitcoin Gold i.e., Bitcoin Gold and ZEL go up and down completely randomly.
Pair Corralation between Bitcoin Gold and ZEL
Assuming the 90 days trading horizon Bitcoin Gold is expected to generate 21.28 times more return on investment than ZEL. However, Bitcoin Gold is 21.28 times more volatile than ZEL. It trades about 0.08 of its potential returns per unit of risk. ZEL is currently generating about -0.38 per unit of risk. If you would invest 776.00 in Bitcoin Gold on November 29, 2024 and sell it today you would lose (497.00) from holding Bitcoin Gold or give up 64.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bitcoin Gold vs. ZEL
Performance |
| Timeline |
| Bitcoin Gold |
| ZEL |
Bitcoin Gold and ZEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitcoin Gold and ZEL
The main advantage of trading using opposite Bitcoin Gold and ZEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin Gold position performs unexpectedly, ZEL 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 ZEL will offset losses from the drop in ZEL's long position.| Bitcoin Gold vs. Bitcoin Cash | Bitcoin Gold vs. Bitcoin SV | Bitcoin Gold vs. Staked Ether | Bitcoin Gold vs. Phala Network |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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