Correlation Between Avalanche and SingularityNET

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

Diversification Opportunities for Avalanche and SingularityNET

  Correlation Coefficient

Weak diversification

The 3 months correlation between Avalanche and SingularityNET is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Avalanche and SingularityNET in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SingularityNET and Avalanche 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 Avalanche 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 Avalanche i.e., Avalanche and SingularityNET go up and down completely randomly.

Pair Corralation between Avalanche and SingularityNET

Assuming the 90 days trading horizon Avalanche is expected to under-perform the SingularityNET. But the crypto coin apears to be less risky and, when comparing its historical volatility, Avalanche is 1.85 times less risky than SingularityNET. The crypto coin trades about -0.1 of its potential returns per unit of risk. The SingularityNET is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  4.26  in SingularityNET on July 1, 2022 and sell it today you would earn a total of  0.46  from holding SingularityNET or generate 10.8% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
ValuesDaily Returns

Avalanche  vs.  SingularityNET

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

Avalanche Price Channel

SingularityNET Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in SingularityNET are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, SingularityNET sustained solid returns over the last few months and may actually be approaching a breakup point.

SingularityNET Price Channel

Avalanche and SingularityNET Volatility Contrast

   Predicted Return Density   

Pair Trading with Avalanche and SingularityNET

The main advantage of trading using opposite Avalanche and SingularityNET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avalanche 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.
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The idea behind Avalanche 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.
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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