Correlation Between Bitcoin SV and Bitcoin

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

Diversification Opportunities for Bitcoin SV and Bitcoin

0.87
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Bitcoin and Bitcoin is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin SV and Bitcoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitcoin and Bitcoin SV 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 SV are associated (or correlated) with Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitcoin has no effect on the direction of Bitcoin SV i.e., Bitcoin SV and Bitcoin go up and down completely randomly.

Pair Corralation between Bitcoin SV and Bitcoin

Assuming the 90 days trading horizon Bitcoin SV is expected to generate 1.05 times more return on investment than Bitcoin. However, Bitcoin SV is 1.05 times more volatile than Bitcoin. It trades about 0.01 of its potential returns per unit of risk. Bitcoin is currently generating about -0.08 per unit of risk. If you would invest  4,197  in Bitcoin SV on September 6, 2022 and sell it today you would lose (64.00)  from holding Bitcoin SV or give up 1.52% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Bitcoin SV  vs.  Bitcoin

 Performance (%) 
       Timeline  
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 weak performance in the last few months, the Crypto's basic indicators remain somewhat strong which may send shares a bit higher in January 2023. The current disturbance may also be a sign of long term up-swing for Bitcoin SV investors.

Bitcoin Price Channel

Bitcoin 
Bitcoin Performance
0 of 100
Over the last 90 days Bitcoin 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 investors.

Bitcoin Price Channel

Bitcoin SV and Bitcoin Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bitcoin SV and Bitcoin

The main advantage of trading using opposite Bitcoin SV and Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin SV position performs unexpectedly, Bitcoin 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 will offset losses from the drop in Bitcoin's long position.
Bitcoin SV vs. Bitcoin
Bitcoin SV vs. Dogecoin
Bitcoin SV vs. Litecoin
Bitcoin SV vs. Monero
The idea behind Bitcoin SV and Bitcoin 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 vs. Dogecoin
Bitcoin vs. Litecoin
Bitcoin vs. Monero
Bitcoin vs. Ethereum Classic
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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