Correlation Between ApeCoin and FTX Token

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

Diversification Opportunities for ApeCoin and FTX Token

0.86
  Correlation Coefficient

Very poor diversification

The 3 months correlation between ApeCoin and FTX Token is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding ApeCoin and FTX Token in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTX Token and ApeCoin 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 ApeCoin are associated (or correlated) with FTX Token. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FTX Token has no effect on the direction of ApeCoin i.e., ApeCoin and FTX Token go up and down completely randomly.

Pair Corralation between ApeCoin and FTX Token

Assuming the 90 days trading horizon ApeCoin is expected to generate 2.54 times more return on investment than FTX Token. However, ApeCoin is 2.54 times more volatile than FTX Token. It trades about 0.18 of its potential returns per unit of risk. FTX Token is currently generating about -0.16 per unit of risk. If you would invest  480.00  in ApeCoin on June 29, 2022 and sell it today you would earn a total of  86.00  from holding ApeCoin or generate 17.92% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

ApeCoin  vs.  FTX Token

 Performance (%) 
       Timeline  
ApeCoin 
ApeCoin Performance
0 of 100
Over the last 90 days ApeCoin has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat weak basic indicators, ApeCoin sustained solid returns over the last few months and may actually be approaching a breakup point.
FTX Token 
FTX Token Performance
0 of 100
Over the last 90 days FTX Token has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, FTX Token is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

ApeCoin and FTX Token Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ApeCoin and FTX Token

The main advantage of trading using opposite ApeCoin and FTX Token positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ApeCoin position performs unexpectedly, FTX Token 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 FTX Token will offset losses from the drop in FTX Token's long position.
The idea behind ApeCoin and FTX Token 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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