Correlation Between Ethereum Classic and Bitcoin Cash
Can any of the company-specific risk be diversified away by investing in both Ethereum Classic and Bitcoin Cash 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 Ethereum Classic and Bitcoin Cash into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ethereum Classic and Bitcoin Cash, you can compare the effects of market volatilities on Ethereum Classic and Bitcoin Cash 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 Ethereum Classic with a short position of Bitcoin Cash. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ethereum Classic and Bitcoin Cash.
Diversification Opportunities for Ethereum Classic and Bitcoin Cash
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ethereum and Bitcoin is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Ethereum Classic and Bitcoin Cash in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitcoin Cash and Ethereum Classic 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 Ethereum Classic are associated (or correlated) with Bitcoin Cash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitcoin Cash has no effect on the direction of Ethereum Classic i.e., Ethereum Classic and Bitcoin Cash go up and down completely randomly.
Pair Corralation between Ethereum Classic and Bitcoin Cash
Assuming the 90 days trading horizon Ethereum Classic is expected to generate 1.07 times more return on investment than Bitcoin Cash. However, Ethereum Classic is 1.07 times more volatile than Bitcoin Cash. It trades about -0.2 of its potential returns per unit of risk. Bitcoin Cash is currently generating about -0.29 per unit of risk. If you would invest 2,689 in Ethereum Classic on November 18, 2024 and sell it today you would lose (607.00) from holding Ethereum Classic or give up 22.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ethereum Classic vs. Bitcoin Cash
Performance |
| Timeline |
| Ethereum Classic |
| Bitcoin Cash |
Ethereum Classic and Bitcoin Cash Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ethereum Classic and Bitcoin Cash
The main advantage of trading using opposite Ethereum Classic and Bitcoin Cash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ethereum Classic position performs unexpectedly, Bitcoin Cash 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 Bitcoin Cash will offset losses from the drop in Bitcoin Cash's long position.| Ethereum Classic vs. Ethereum PoW | Ethereum Classic vs. Ethereum Name Service | Ethereum Classic vs. Staked Ether | Ethereum Classic vs. Phala Network |
| Bitcoin Cash vs. Bitcoin Gold | Bitcoin Cash vs. Bitcoin SV | Bitcoin Cash vs. Staked Ether | Bitcoin Cash 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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