Correlation Between ApeCoin and Chainlink

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

Diversification Opportunities for ApeCoin and Chainlink

0.59
  Correlation Coefficient

Very weak diversification

The 3 months correlation between ApeCoin and Chainlink is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding ApeCoin and Chainlink in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chainlink 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 Chainlink. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chainlink has no effect on the direction of ApeCoin i.e., ApeCoin and Chainlink go up and down completely randomly.

Pair Corralation between ApeCoin and Chainlink

Assuming the 90 days trading horizon ApeCoin is expected to generate 1.08 times more return on investment than Chainlink. However, ApeCoin is 1.08 times more volatile than Chainlink. It trades about 0.1 of its potential returns per unit of risk. Chainlink is currently generating about 0.09 per unit of risk. If you would invest  475.00  in ApeCoin on July 4, 2022 and sell it today you would earn a total of  50.00  from holding ApeCoin or generate 10.53% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

ApeCoin  vs.  Chainlink

 Performance (%) 
       Timeline  
ApeCoin 
ApeCoin Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in ApeCoin are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, ApeCoin sustained solid returns over the last few months and may actually be approaching a breakup point.

ApeCoin Price Channel

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

Chainlink Price Channel

ApeCoin and Chainlink Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ApeCoin and Chainlink

The main advantage of trading using opposite ApeCoin and Chainlink positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ApeCoin position performs unexpectedly, Chainlink 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 Chainlink will offset losses from the drop in Chainlink's long position.
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ApeCoin vs. Chainlink
The idea behind ApeCoin and Chainlink 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.
Chainlink vs. XRP
Chainlink vs. Solana
Chainlink vs. Polkadot
Chainlink vs. Polygon
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.

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