Correlation Between Bitcoin Cash and Bitcoin SV

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Can any of the company-specific risk be diversified away by investing in both Bitcoin Cash 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 Bitcoin Cash and Bitcoin SV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin Cash and Bitcoin SV, you can compare the effects of market volatilities on Bitcoin Cash 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 Bitcoin Cash with a short position of Bitcoin SV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin Cash and Bitcoin SV.

Diversification Opportunities for Bitcoin Cash and Bitcoin SV

0.75
  Correlation Coefficient

Poor diversification

The 3 months correlation between Bitcoin and Bitcoin is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin Cash and Bitcoin SV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitcoin SV and Bitcoin Cash 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 Bitcoin Cash 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 Bitcoin Cash i.e., Bitcoin Cash and Bitcoin SV go up and down completely randomly.

Pair Corralation between Bitcoin Cash and Bitcoin SV

Assuming the 90 days trading horizon Bitcoin Cash is expected to generate 1.14 times more return on investment than Bitcoin SV. However, Bitcoin Cash is 1.14 times more volatile than Bitcoin SV. It trades about -0.05 of its potential returns per unit of risk. Bitcoin SV is currently generating about -0.09 per unit of risk. If you would invest  12,450  in Bitcoin Cash on September 4, 2022 and sell it today you would lose (1,248)  from holding Bitcoin Cash or give up 10.02% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Bitcoin Cash  vs.  Bitcoin SV

 Performance (%) 
       Timeline  
Bitcoin Cash 
Bitcoin Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Bitcoin Cash are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Bitcoin Cash may actually be approaching a critical reversion point that can send shares even higher in January 2023.

Bitcoin Price Channel

Bitcoin SV 
Bitcoin Performance
0 of 100
Over the last 90 days Bitcoin SV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Crypto's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for Bitcoin SV investors.

Bitcoin Price Channel

Bitcoin Cash and Bitcoin SV Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bitcoin Cash and Bitcoin SV

The main advantage of trading using opposite Bitcoin Cash and Bitcoin SV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin Cash 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.
Bitcoin Cash vs. Bitcoin
Bitcoin Cash vs. Dogecoin
Bitcoin Cash vs. Litecoin
Bitcoin Cash vs. Monero
The idea behind Bitcoin Cash and Bitcoin SV 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 SV vs. Bitcoin
Bitcoin SV vs. Dogecoin
Bitcoin SV vs. Litecoin
Bitcoin SV vs. Monero
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

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