Correlation Between Bitcoin Gold and Monero

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

Diversification Opportunities for Bitcoin Gold and Monero

0.68
  Correlation Coefficient

Poor diversification

The 3 months correlation between Bitcoin and Monero is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin Gold and Monero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monero and Bitcoin Gold 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 Gold are associated (or correlated) with Monero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monero has no effect on the direction of Bitcoin Gold i.e., Bitcoin Gold and Monero go up and down completely randomly.

Pair Corralation between Bitcoin Gold and Monero

Assuming the 90 days trading horizon Bitcoin Gold is expected to under-perform the Monero. In addition to that, Bitcoin Gold is 1.2 times more volatile than Monero. It trades about -0.01 of its total potential returns per unit of risk. Monero is currently generating about 0.06 per unit of volatility. If you would invest  13,842  in Monero on September 8, 2022 and sell it today you would earn a total of  524.00  from holding Monero or generate 3.79% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy95.65%
ValuesDaily Returns

Bitcoin Gold  vs.  Monero

 Performance (%) 
       Timeline  
Bitcoin Gold 
Bitcoin Performance
0 of 100
Over the last 90 days Bitcoin Gold 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 Gold investors.

Bitcoin Price Channel

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

Monero Price Channel

Bitcoin Gold and Monero Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bitcoin Gold and Monero

The main advantage of trading using opposite Bitcoin Gold and Monero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin Gold position performs unexpectedly, Monero 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 Monero will offset losses from the drop in Monero's long position.
Bitcoin Gold vs. Bitcoin
Bitcoin Gold vs. Dogecoin
Bitcoin Gold vs. Litecoin
Bitcoin Gold vs. Monero
The idea behind Bitcoin Gold and Monero 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.
Monero vs. Bitcoin
Monero vs. Dogecoin
Monero vs. Litecoin
Monero 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

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