Correlation Between ZCash and Dogecoin

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

Diversification Opportunities for ZCash and Dogecoin

-0.45
  Correlation Coefficient

Very good diversification

The 3 months correlation between ZCash and Dogecoin is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding ZCash and Dogecoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dogecoin and ZCash 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 ZCash are associated (or correlated) with Dogecoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dogecoin has no effect on the direction of ZCash i.e., ZCash and Dogecoin go up and down completely randomly.

Pair Corralation between ZCash and Dogecoin

Assuming the 90 days trading horizon ZCash is expected to under-perform the Dogecoin. But the crypto coin apears to be less risky and, when comparing its historical volatility, ZCash is 1.0 times less risky than Dogecoin. The crypto coin trades about -0.03 of its potential returns per unit of risk. The Dogecoin is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  24.00  in Dogecoin on September 6, 2022 and sell it today you would lose (14.04)  from holding Dogecoin or give up 58.5% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

ZCash  vs.  Dogecoin

 Performance (%) 
       Timeline  
ZCash 
ZCash Performance
0 of 100
Over the last 90 days ZCash 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 technical and fundamental 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 ZCash investors.

ZCash Price Channel

Dogecoin 
Dogecoin Performance
9 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Dogecoin are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Dogecoin sustained solid returns over the last few months and may actually be approaching a breakup point.

Dogecoin Price Channel

ZCash and Dogecoin Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ZCash and Dogecoin

The main advantage of trading using opposite ZCash and Dogecoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZCash position performs unexpectedly, Dogecoin 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 Dogecoin will offset losses from the drop in Dogecoin's long position.
ZCash vs. Bitcoin
ZCash vs. Dogecoin
ZCash vs. Litecoin
ZCash vs. Monero
The idea behind ZCash and Dogecoin 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.
Dogecoin vs. Bitcoin
Dogecoin vs. Litecoin
Dogecoin vs. Monero
Dogecoin 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.

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