Correlation Between Aave and COCOS BCX

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Aave and COCOS BCX 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 Aave and COCOS BCX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aave and COCOS BCX, you can compare the effects of market volatilities on Aave and COCOS BCX 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 Aave with a short position of COCOS BCX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aave and COCOS BCX.

Diversification Opportunities for Aave and COCOS BCX

0.04
  Correlation Coefficient

Significant diversification

The 2 months correlation between Aave and COCOS is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Aave and COCOS BCX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COCOS BCX and Aave 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 Aave are associated (or correlated) with COCOS BCX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COCOS BCX has no effect on the direction of Aave i.e., Aave and COCOS BCX go up and down completely randomly.

Pair Corralation between Aave and COCOS BCX

Assuming the 90 days trading horizon Aave is expected to under-perform the COCOS BCX. But the crypto coin apears to be less risky and, when comparing its historical volatility, Aave is 40.53 times less risky than COCOS BCX. The crypto coin trades about -0.15 of its potential returns per unit of risk. The COCOS BCX is currently generating about 0.49 of returns per unit of risk over similar time horizon. If you would invest  0.06  in COCOS BCX on March 29, 2022 and sell it today you would earn a total of  57.94  from holding COCOS BCX or generate 91817.59% return on investment over 90 days.
Time Period2 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Aave  vs.  COCOS BCX

 Performance (%) 
      Timeline 
Aave 
Aave Performance
0 of 100
Over the last 90 days Aave 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 July 2022. The current disturbance may also be a sign of long term up-swing for Aave investors.

Aave Price Channel

COCOS BCX 
COCOS Performance
41 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in COCOS BCX are ranked lower than 41 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, COCOS BCX sustained solid returns over the last few months and may actually be approaching a breakup point.

COCOS Price Channel

Aave and COCOS BCX Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Aave and COCOS BCX

The main advantage of trading using opposite Aave and COCOS BCX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aave position performs unexpectedly, COCOS BCX 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 COCOS BCX will offset losses from the drop in COCOS BCX's long position.
The idea behind Aave and COCOS BCX 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.
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.

Other Complementary Tools

Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
Go
Stock Screener
Find equities using custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Go
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Go
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Go
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Go
Watchlist Optimization
Optimize watchlists to build efficient portfolio or rebalance existing positions based on mean-variance optimization algorithm
Go
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Go
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Go
Analyst Recommendations
Analyst recommendations and target price estimates broken down by several categories
Go