Correlation Between API3 and 1inch

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Can any of the company-specific risk be diversified away by investing in both API3 and 1inch 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 API3 and 1inch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between API3 and 1inch, you can compare the effects of market volatilities on API3 and 1inch 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 API3 with a short position of 1inch. Check out your portfolio center. Please also check ongoing floating volatility patterns of API3 and 1inch.

Diversification Opportunities for API3 and 1inch

0.56
  Correlation Coefficient

Very weak diversification

The 1 month correlation between API3 and 1inch is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding API3 and 1inch in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1inch and API3 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 API3 are associated (or correlated) with 1inch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1inch has no effect on the direction of API3 i.e., API3 and 1inch go up and down completely randomly.

Pair Corralation between API3 and 1inch

Assuming the 90 days trading horizon API3 is expected to generate 1.31 times more return on investment than 1inch. However, API3 is 1.31 times more volatile than 1inch. It trades about 0.03 of its potential returns per unit of risk. 1inch is currently generating about -0.13 per unit of risk. If you would invest  182.00  in API3 on March 29, 2022 and sell it today you would lose (8.00)  from holding API3 or give up 4.4% of portfolio value over 90 days.
Time Period1 Month [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

API3  vs.  1inch

 Performance (%) 
      Timeline 
API3 
API3 Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in API3 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, API3 sustained solid returns over the last few months and may actually be approaching a breakup point.

API3 Price Channel

1inch 
1inch Performance
0 of 100
Over the last 90 days 1inch 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 July 2022. The current disturbance may also be a sign of long term up-swing for 1inch investors.

1inch Price Channel

API3 and 1inch Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with API3 and 1inch

The main advantage of trading using opposite API3 and 1inch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if API3 position performs unexpectedly, 1inch 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 1inch will offset losses from the drop in 1inch's long position.
The idea behind API3 and 1inch 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.

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