Correlation Between Litecoin and VIA
Can any of the company-specific risk be diversified away by investing in both Litecoin and VIA 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 Litecoin and VIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Litecoin and VIA, you can compare the effects of market volatilities on Litecoin and VIA 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 Litecoin with a short position of VIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Litecoin and VIA.
Diversification Opportunities for Litecoin and VIA
Almost no diversification
The 3 months correlation between Litecoin and VIA is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Litecoin and VIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIA and Litecoin 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 Litecoin are associated (or correlated) with VIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIA has no effect on the direction of Litecoin i.e., Litecoin and VIA go up and down completely randomly.
Pair Corralation between Litecoin and VIA
Assuming the 90 days trading horizon Litecoin is expected to generate 0.57 times more return on investment than VIA. However, Litecoin is 1.75 times less risky than VIA. It trades about 0.03 of its potential returns per unit of risk. VIA is currently generating about 0.0 per unit of risk. If you would invest 7,646 in Litecoin on August 23, 2024 and sell it today you would earn a total of 1,338 from holding Litecoin or generate 17.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Litecoin vs. VIA
Performance |
| Timeline |
| Litecoin |
| VIA |
Litecoin and VIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Litecoin and VIA
The main advantage of trading using opposite Litecoin and VIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Litecoin position performs unexpectedly, VIA 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 VIA will offset losses from the drop in VIA's long position.The idea behind Litecoin and VIA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |