Correlation Between Ethereum Classic and Bitcoin SV
Can any of the company-specific risk be diversified away by investing in both Ethereum Classic and Bitcoin SV 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 SV 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 SV, you can compare the effects of market volatilities on Ethereum Classic and Bitcoin SV 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 SV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ethereum Classic and Bitcoin SV.
Diversification Opportunities for Ethereum Classic and Bitcoin SV
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ethereum and Bitcoin is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Ethereum Classic and Bitcoin SV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitcoin SV 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 SV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitcoin SV has no effect on the direction of Ethereum Classic i.e., Ethereum Classic and Bitcoin SV go up and down completely randomly.
Pair Corralation between Ethereum Classic and Bitcoin SV
Assuming the 90 days trading horizon Ethereum Classic is expected to generate 1.32 times more return on investment than Bitcoin SV. However, Ethereum Classic is 1.32 times more volatile than Bitcoin SV. It trades about -0.2 of its potential returns per unit of risk. Bitcoin SV is currently generating about -0.38 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 | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ethereum Classic vs. Bitcoin SV
Performance |
| Timeline |
| Ethereum Classic |
| Bitcoin SV |
Ethereum Classic and Bitcoin SV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ethereum Classic and Bitcoin SV
The main advantage of trading using opposite Ethereum Classic and Bitcoin SV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ethereum Classic position performs unexpectedly, Bitcoin SV 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 SV will offset losses from the drop in Bitcoin SV'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 SV vs. Bitcoin Gold | Bitcoin SV vs. Bitcoin Cash | Bitcoin SV vs. Staked Ether | Bitcoin SV 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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