Correlation Between Ethereum Classic and DGB
Can any of the company-specific risk be diversified away by investing in both Ethereum Classic and DGB 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 DGB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ethereum Classic and DGB, you can compare the effects of market volatilities on Ethereum Classic and DGB 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 DGB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ethereum Classic and DGB.
Diversification Opportunities for Ethereum Classic and DGB
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ethereum and DGB is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Ethereum Classic and DGB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DGB 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 DGB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DGB has no effect on the direction of Ethereum Classic i.e., Ethereum Classic and DGB go up and down completely randomly.
Pair Corralation between Ethereum Classic and DGB
Assuming the 90 days trading horizon Ethereum Classic is expected to generate 0.93 times more return on investment than DGB. However, Ethereum Classic is 1.08 times less risky than DGB. It trades about -0.2 of its potential returns per unit of risk. DGB is currently generating about -0.27 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. DGB
Performance |
| Timeline |
| Ethereum Classic |
| DGB |
Ethereum Classic and DGB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ethereum Classic and DGB
The main advantage of trading using opposite Ethereum Classic and DGB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ethereum Classic position performs unexpectedly, DGB 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 DGB will offset losses from the drop in DGB's long position.| Ethereum Classic vs. Ethereum PoW | Ethereum Classic vs. Ethereum Name Service | Ethereum Classic vs. Staked Ether | Ethereum Classic 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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