Correlation Between Ethereum Classic and XVG
Can any of the company-specific risk be diversified away by investing in both Ethereum Classic and XVG 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 XVG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ethereum Classic and XVG, you can compare the effects of market volatilities on Ethereum Classic and XVG 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 XVG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ethereum Classic and XVG.
Diversification Opportunities for Ethereum Classic and XVG
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ethereum and XVG is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Ethereum Classic and XVG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XVG 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 XVG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XVG has no effect on the direction of Ethereum Classic i.e., Ethereum Classic and XVG go up and down completely randomly.
Pair Corralation between Ethereum Classic and XVG
Assuming the 90 days trading horizon Ethereum Classic is expected to generate 25.39 times less return on investment than XVG. But when comparing it to its historical volatility, Ethereum Classic is 2.06 times less risky than XVG. It trades about 0.0 of its potential returns per unit of risk. XVG is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 0.57 in XVG on August 27, 2024 and sell it today you would earn a total of 0.16 from holding XVG or generate 28.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ethereum Classic vs. XVG
Performance |
| Timeline |
| Ethereum Classic |
| XVG |
Ethereum Classic and XVG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ethereum Classic and XVG
The main advantage of trading using opposite Ethereum Classic and XVG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ethereum Classic position performs unexpectedly, XVG 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 XVG will offset losses from the drop in XVG's long position.| Ethereum Classic vs. Ethereum PoW | Ethereum Classic vs. Ethereum Name Service | Ethereum Classic vs. Staked Ether | Ethereum Classic vs. EigenLayer |
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 CEOs Directory module to screen CEOs from public companies around the world.
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