Correlation Between Avalanche and Tezos

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

Diversification Opportunities for Avalanche and Tezos

0.93
  Correlation Coefficient

Almost no diversification

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

Pair Corralation between Avalanche and Tezos

Assuming the 90 days trading horizon Avalanche is expected to under-perform the Tezos. But the crypto coin apears to be less risky and, when comparing its historical volatility, Avalanche is 1.04 times less risky than Tezos. The crypto coin trades about -0.25 of its potential returns per unit of risk. The Tezos is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest  180.00  in Tezos on July 7, 2022 and sell it today you would lose (34.00)  from holding Tezos or give up 18.89% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Avalanche  vs.  Tezos

 Performance (%) 
       Timeline  
Avalanche 
Avalanche Performance
0 of 100
Over the last 90 days Avalanche has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Avalanche is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Avalanche Price Channel

Tezos 
Tezos Performance
0 of 100
Over the last 90 days Tezos has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Tezos is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Tezos Price Channel

Avalanche and Tezos Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Avalanche and Tezos

The main advantage of trading using opposite Avalanche and Tezos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avalanche position performs unexpectedly, Tezos 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 Tezos will offset losses from the drop in Tezos' long position.
Avalanche vs. Ethereum
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Avalanche vs. Cardano
The idea behind Avalanche and Tezos 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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Tezos vs. Solana
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Tezos vs. Chainlink
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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