Correlation Between Bitcoin Gold and JUST

Can any of the company-specific risk be diversified away by investing in both Bitcoin Gold and JUST 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 JUST into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bitcoin Gold and JUST, you can compare the effects of market volatilities on Bitcoin Gold and JUST 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 JUST. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin Gold and JUST.

Diversification Opportunities for Bitcoin Gold and JUST

0.92

Correlation Coefficient

Bitcoin Gold  JUST

Almost no diversification

The 3 months correlation between Bitcoin and JUST is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin Gold and JUST in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JUST 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 JUST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JUST has no effect on the direction of Bitcoin Gold i.e., Bitcoin Gold and JUST go up and down completely randomly.

Pair Corralation between Bitcoin Gold and JUST

Assuming the 90 days trading horizon Bitcoin Gold is expected to generate 1.46 times more return on investment than JUST. However, Bitcoin Gold is 1.46 times more volatile than JUST. It trades about 0.2 of its potential returns per unit of risk. JUST is currently generating about 0.16 per unit of risk. If you would invest  1,981  in Bitcoin Gold on September 1, 2024 and sell it today you would earn a total of  1,401  from holding Bitcoin Gold or generate 70.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Bitcoin Gold  vs.  JUST

Bitcoin Gold

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bitcoin Gold are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Bitcoin Gold exhibited solid returns over the last few months and may actually be approaching a breakup point.

JUST

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JUST are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, JUST exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bitcoin Gold and JUST

The main advantage of trading using opposite Bitcoin Gold and JUST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin Gold position performs unexpectedly, JUST 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 JUST will offset losses from the drop in JUST's long position.

The idea behind Bitcoin Gold and JUST 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.

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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 the Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.