Correlation Between Algorand and SingularityNET

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

Diversification Opportunities for Algorand and SingularityNET

0.93
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Algorand and SingularityNET is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Algorand and SingularityNET in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SingularityNET and Algorand 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 Algorand are associated (or correlated) with SingularityNET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SingularityNET has no effect on the direction of Algorand i.e., Algorand and SingularityNET go up and down completely randomly.

Pair Corralation between Algorand and SingularityNET

Assuming the 90 days trading horizon Algorand is expected to generate 1.23 times more return on investment than SingularityNET. However, Algorand is 1.23 times more volatile than SingularityNET. It trades about -0.14 of its potential returns per unit of risk. SingularityNET is currently generating about -0.28 per unit of risk. If you would invest  70.00  in Algorand on March 28, 2022 and sell it today you would lose (35.00)  from holding Algorand or give up 50.0% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Algorand  vs.  SingularityNET

 Performance (%) 
      Timeline 
Algorand 
Algorand Performance
0 of 100
Over the last 90 days Algorand 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 technical and fundamental 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 Algorand investors.

Algorand Price Channel

SingularityNET 
SingularityNET Performance
0 of 100
Over the last 90 days SingularityNET 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 technical and fundamental 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 SingularityNET investors.

SingularityNET Price Channel

Algorand and SingularityNET Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Algorand and SingularityNET

The main advantage of trading using opposite Algorand and SingularityNET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algorand position performs unexpectedly, SingularityNET 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 SingularityNET will offset losses from the drop in SingularityNET's long position.
The idea behind Algorand and SingularityNET 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.

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