Post
Topic
Board Trading Discussion
Merits 6 from 5 users
Re: Minimizing the risk- How much possible it is?
by
dbshck
on 28/01/2020, 15:40:32 UTC
⭐ Merited by Husna QA (2) ,ryzaadit (1) ,RapTarX (1) ,kawetsriyanto (1) ,Rengga Jati (1)
That would be good. I have to do some extra work; that's not something hard but lot of works behind the scene. I guess I can do it without finding out the correlation between both the investment. Rather, I would put $100, $50 in BTC in $25 for each altcoin. It's the same thing, isn't it?
I'm not sure but putting $50 in BTC and $25 on each A and B means you're not well diversified. When Bitcoin goes down, A will go down too. You will have loss on two coins (BTC and A) and positive on one (B). You should only put BTC and B or A and B if you're looking to diversify your portfolio and minimize your risk.

I actually do not trust this "predictor" site to give out correlations without knowing the algorithm behind it. Do you have any idea what algorithm they might be using? Unless I know that I wont use it. Also if I know that then I would probably learn how to apply it myself. Grin
The algorithm is simple. As I said above, they just have had some math on the last 100 days & based on that, they have calculated the correlation.
In fact, correlation is just a statistical function.

image source

You can even do it yourself using Excel (=CORREL) if you have the historical price data, which you can get from sites like CryptoCompare for free.