Bitcoin Volatility

BTC
 Crypto
  

USD 24,450  37.69  0.15%   

Bitcoin secures Sharpe Ratio (or Efficiency) of -0.0439, which signifies that digital coin had -0.0439% of return per unit of risk over the last 3 months. Macroaxis standpoint towards foreseeing the risk of any crypto is to look at both systematic and unsystematic factors of the business, including all available market data and technical indicators. Bitcoin exposes twenty-one different technical indicators, which can help you to evaluate volatility that cannot be diversified away. Please be advised to confirm Bitcoin mean deviation of 3.18, and Risk Adjusted Performance of (0.040887) to double-check the risk estimate we provide.
  
Bitcoin Crypto Coin volatility depicts how high the prices fluctuate around the mean (or its average) price. In other words, it is a statistical measure of the distribution of Bitcoin daily returns, and it is calculated using variance and standard deviation. We also use Bitcoin's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Bitcoin volatility.

30 Days Market Risk

Very risky

Chance of Distress

Very Small

30 Days Economic Sensitivity

Responds to the market
Since volatility provides cryptocurrency investors with entry points to take advantage of coin prices, projects, such as Bitcoin can benefit from it. Downward market volatility can be a perfect environment for traders who play the long game. Here, they may decide to buy additional shares of Bitcoin at lower prices. For example, an investor can purchase Bitcoin coin that has halved in price over a short period. This will lower your average cost per share, thereby improving your portfolio's performance when the markets normalize. Similarly, when the prices of Bitcoin's crypto rises, investors can sell out and invest the proceeds in other coins with better opportunities. Investing when markets are volatile with better valuations will accord both investors and defi or crypto projects the opportunity to generate better long-term returns.

Moving together with Bitcoin

0.85ETHEthereumPairCorr
0.9DOGEDogecoinPairCorr
0.82LTCLitecoinPairCorr
0.89XMRMoneroPairCorr
0.97BCHBitcoin CashPairCorr
0.78MIOTAIOTAPairCorr

Bitcoin Market Sensitivity And Downside Risk

Bitcoin's beta coefficient measures the volatility of Bitcoin crypto coin compared to the systematic risk of the entire stock market represented by your selected benchmark. In mathematical terms, beta represents the slope of the line through a regression of data points where each of these points represents Bitcoin crypto coin's returns against your selected market. In other words, Bitcoin's beta of 1.28 provides an investor with an approximation of how much risk Bitcoin crypto coin can potentially add to one of your existing portfolios.
Bitcoin exhibits very low volatility with skewness of -1.25 and kurtosis of 5.73. However, we advise investors to further study Bitcoin technical indicators to make sure all market info is available and is reliable. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Bitcoin's crypto coin risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Bitcoin's crypto coin price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Bitcoin Implied Volatility

Bitcoin's implied volatility exposes the market's sentiment of Bitcoin stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Bitcoin's implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Bitcoin stock will not fluctuate a lot when Bitcoin's options are near their expiration.
3 Months Beta |Analyze Bitcoin Demand Trend
Check current 90 days Bitcoin correlation with market (DOW)

Bitcoin Beta

    
  1.28  
Bitcoin standard deviation measures the daily dispersion of prices over your selected time horizon relative to its mean. Typical volatile equity has a high standard deviation, while the deviation of a stable instrument is usually low. As a downside, the standard deviation calculates all uncertainty as risk, even when it is in your favor, such as above-average returns.

Standard Deviation

    
  4.84  
It is essential to understand the difference between upside risk (as represented by Bitcoin's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Bitcoin's daily returns or price. Since the actual investment returns on holding a position in bitcoin crypto coin tend to have a non-normal distribution, there will be different probabilities for losses than for gains. The likelihood of losses is reflected in the downside risk of an investment in Bitcoin.

Bitcoin Crypto Coin Volatility Analysis

Volatility refers to the frequency at which Bitcoin crypto price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with Bitcoin's price changes. Investors will then calculate the volatility of Bitcoin's crypto coin to predict their future moves. A crypto that has erratic price changes quickly hits new highs, and lows are considered highly volatile. A crypto coin with relatively stable price changes has low volatility. A highly volatile crypto is riskier, but the risk cuts both ways. Investing in highly volatile security can either be highly successful, or you may experience significant failure. There are two main types of Bitcoin's volatility:

Historical Volatility

This type of crypto volatility measures Bitcoin's fluctuations based on previous trends. It's commonly used to predict Bitcoin's future behavior based on its past. However, it cannot conclusively determine the future direction of the crypto coin.

Implied Volatility

This type of volatility provides a positive outlook on future price fluctuations for Bitcoin's current market price. This means that the crypto will return to its initially predicted market price.
Transformation
The output start index for this execution was zero with a total number of output elements of sixty-one. Bitcoin Average Price is the average of the sum of open, high, low and close daily prices of a bar. It can be used to smooth an indicator that normally takes just the closing price as input.
.

Bitcoin Projected Return Density Against Market

Assuming the 90 days trading horizon the crypto coin has the beta coefficient of 1.2837 suggesting as the benchmark fluctuates upward, the company is expected to outperform it on average. However, if the benchmark returns are projected to be negative, Bitcoin will likely underperform.
Most traded cryptocurrencies are subject to two types of risk - systematic (i.e., market) and unsystematic (i.e., nonmarket or coin-specific or project-specific) risk. Unsystematic risk is the risk that events specific to Bitcoin project will adversely affect the coin's price. This type of risk can be diversified away by owning several different digital assets on different exchanges whose coin prices have shown a small correlation to each other. On the other hand, systematic risk is the risk that Bitcoin's price will be affected by overall cryptocurrency market movements and cannot be diversified away. So, no matter how many positions you have, you cannot eliminate market risk. However, you can measure a Bitcoin crypto's historical response to market movements and buy it if you are comfortable with its volatility direction. Beta and standard deviation are two commonly used measures to help you make the right decision.
The company has a negative alpha, implying that the risk taken by holding this instrument is not justified. Bitcoin is significantly underperforming DOW.
   Predicted Return Density   
       Returns  
Bitcoin's volatility of a cryptocurrency is measured either by using standard deviation or beta. Standard deviation will reflect the average amount of how bitcoin crypto coin's price will differ from the historical average after some time. There is a big difference when you buy Bitcoin from a government-approved cryptocurrency exchange like Coinbase or a marketplace managed by a foreign entity. Using a local, USA-based marketplace will be less exposed to price manipulation. However, just like with stock markets, cryptocurrencies fluctuate because it is influenced by constant media hype, basic supply and demand laws, investor sentiments, and government regulations. These factors work together to add to Bitcoin's price volatility.

Bitcoin Crypto Coin Risk Measures

Most traded cryptocurrencies are subject to two types of risk - systematic (i.e., market) and unsystematic (i.e., nonmarket or coin-specific or project-specific) risk. Unsystematic risk is the risk that events specific to Bitcoin project will adversely affect the coin's price. This type of risk can be diversified away by owning several different digital assets on different exchanges whose coin prices have shown a small correlation to each other. On the other hand, systematic risk is the risk that Bitcoin's price will be affected by overall cryptocurrency market movements and cannot be diversified away. So, no matter how many positions you have, you cannot eliminate market risk. However, you can measure a Bitcoin crypto's historical response to market movements and buy it if you are comfortable with its volatility direction. Beta and standard deviation are two commonly used measures to help you make the right decision.
Assuming the 90 days trading horizon the coefficient of variation of Bitcoin is -2280.48. The daily returns are distributed with a variance of 23.42 and standard deviation of 4.84. The mean deviation of Bitcoin is currently at 3.09. For similar time horizon, the selected benchmark (DOW) has volatility of 1.25
α
Alpha over DOW
-0.32
β
Beta against DOW1.28
σ
Overall volatility
4.84
Ir
Information ratio -0.06

Bitcoin Crypto Coin Return Volatility

Bitcoin historical daily return volatility represents how much of Bitcoin crypto's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. Keep in mind that cryptocurrencies such as Bitcoin have only been around for a short time and are still in the price discovery phase. This means that prices will continue to change as investors and governments work through the initial concerns until prices stabilize, provided a stable point can be reached. Bitcoin assumes 4.8394% volatility of returns over the 90 days investment horizon. By contrast, DOW inherits 1.181% risk (volatility on return distribution) over the 90 days horizon.
 Performance (%) 
       Timeline  

About Bitcoin Volatility

Volatility is a rate at which the price of Bitcoin or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of Bitcoin may increase or decrease. In other words, similar to Bitcoin's beta indicator, it measures the risk of Bitcoin and helps estimate the fluctuations that may happen in a short period of time. So if prices of Bitcoin fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility.
Please read more on our technical analysis page.
Bitcoin is peer-to-peer digital currency powered by the Blockchain technology.

Bitcoin Investment Opportunity

Bitcoin has a volatility of 4.84 and is 4.1 times more volatile than DOW. 42  of all equities and portfolios are less risky than Bitcoin. Compared to the overall equity markets, volatility of historical daily returns of Bitcoin is lower than 42 () of all global equities and portfolios over the last 90 days.
Use Bitcoin to enhance the returns of your portfolios. Benchmarks are essential to demonstrate the utility of optimization algorithms. The crypto coin experiences a normal upward fluctuation. Check odds of Bitcoin to be traded at $25672.35 in 90 days. .

Weak diversification

The correlation between Bitcoin and DJI is Weak diversification for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and DJI in the same portfolio, assuming nothing else is changed.
Please note that Bitcoin is a digital instrument and cryptocurrency exchanges were notoriously volatile since the beginning of their establishment.

Bitcoin Additional Risk Indicators

The analysis of Bitcoin's secondary risk indicators is one of the essential steps in making a buy or sell decision. The process involves identifying the amount of risk involved in Bitcoin's investment and either accepting that risk or mitigating it. Along with some common measures of Bitcoin crypto coin's risk such as standard deviation, beta, or value at risk, we also provide a set of secondary indicators that can assist in the individual investment decision or help in hedging the risk of your existing portfolios.
Risk Adjusted Performance(0.040887)
Market Risk Adjusted Performance(0.15)
Mean Deviation3.18
Coefficient Of Variation(2,576)
Standard Deviation4.87
Variance23.73
Information Ratio(0.06)
Please note, the risk measures we provide can be used independently or collectively to perform a risk assessment. When comparing two potential crypto coins, we recommend comparing similar cryptos with homogenous growth potential and valuation from related markets to determine which investment holds the most risk.

Bitcoin Suggested Diversification Pairs

Pair trading is one of the very effective strategies used by professional day traders and hedge funds capitalizing on short-time and mid-term market inefficiencies. The approach is based on the fact that the ratio of prices of two correlating shares is long-term stable and oscillates around the average value. If the correlation ratio comes outside the common area, you can speculate with a high success rate that the ratio will return to the mean value and collect a profit.
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The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Bitcoin as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Bitcoin's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Bitcoin's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Bitcoin.
Continue to Trending Equities. Note that the Bitcoin information on this page should be used as a complementary analysis to other Bitcoin's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

Other Tools for Bitcoin Crypto Coin

When running Bitcoin price analysis, check to measure Bitcoin's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Bitcoin is operating at the current time. Most of Bitcoin's value examination focuses on studying past and present price action to predict the probability of Bitcoin's future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move Bitcoin's price. Additionally, you may evaluate how the addition of Bitcoin to your portfolios can decrease your overall portfolio volatility.
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