Correlation Between Cardano and Beta Finance

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

Diversification Opportunities for Cardano and Beta Finance

0.01
  Correlation Coefficient

Significant diversification

The 24 months correlation between Cardano and Beta Finance is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Cardano and Beta Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beta Finance and Cardano 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 Cardano are associated (or correlated) with Beta Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beta Finance has no effect on the direction of Cardano i.e., Cardano and Beta Finance go up and down completely randomly.

Pair Corralation between Cardano and Beta Finance

Assuming the 90 days trading horizon Cardano is expected to under-perform the Beta Finance. But the crypto coin apears to be less risky and, when comparing its historical volatility, Cardano is 1.1 times less risky than Beta Finance. The crypto coin trades about -0.24 of its potential returns per unit of risk. The Beta Finance is currently generating about -0.17 of returns per unit of risk over similar time horizon. If you would invest  13.00  in Beta Finance on April 8, 2022 and sell it today you would lose (3.00)  from holding Beta Finance or give up 23.08% of portfolio value over 90 days.
Time Period24 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Cardano  vs.  Beta Finance

 Performance (%) 
      Timeline 
Cardano 
Cardano Performance
0 of 100
Over the last 90 days Cardano 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 fundamental indicators remain somewhat strong which may send shares a bit higher in August 2022. The current disturbance may also be a sign of long term up-swing for Cardano investors.

Cardano Price Channel

Beta Finance 
Beta Finance Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Beta Finance are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Beta Finance sustained solid returns over the last few months and may actually be approaching a breakup point.

Beta Finance Price Channel

Cardano and Beta Finance Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Cardano and Beta Finance

The main advantage of trading using opposite Cardano and Beta Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardano position performs unexpectedly, Beta Finance 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 Beta Finance will offset losses from the drop in Beta Finance's long position.
The idea behind Cardano and Beta Finance 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 Piotroski F Score module to get Piotroski F Score based on binary analysis strategy of nine different fundamentals.

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