Correlation Between IOTA and Bitcoin Cash
Can any of the company-specific risk be diversified away by investing in both IOTA 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 IOTA and Bitcoin Cash into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IOTA and Bitcoin Cash, you can compare the effects of market volatilities on IOTA 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 IOTA with a short position of Bitcoin Cash. Check out your portfolio center. Please also check ongoing floating volatility patterns of IOTA and Bitcoin Cash.
Diversification Opportunities for IOTA and Bitcoin Cash
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IOTA and Bitcoin is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding IOTA and Bitcoin Cash in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitcoin Cash and IOTA 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 IOTA 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 IOTA i.e., IOTA and Bitcoin Cash go up and down completely randomly.
Pair Corralation between IOTA and Bitcoin Cash
Assuming the 90 days trading horizon IOTA is expected to generate 1.54 times more return on investment than Bitcoin Cash. However, IOTA is 1.54 times more volatile than Bitcoin Cash. It trades about 0.01 of its potential returns per unit of risk. Bitcoin Cash is currently generating about -0.07 per unit of risk. If you would invest 32.00 in IOTA on November 1, 2024 and sell it today you would lose (1.00) from holding IOTA or give up 3.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
IOTA vs. Bitcoin Cash
Performance |
| Timeline |
| IOTA |
| Bitcoin Cash |
IOTA and Bitcoin Cash Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IOTA and Bitcoin Cash
The main advantage of trading using opposite IOTA and Bitcoin Cash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IOTA 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.The idea behind IOTA and Bitcoin Cash 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.| 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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |