Correlation Between Crescent and Badger DAO

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

Diversification Opportunities for Crescent and Badger DAO

0.21
  Correlation Coefficient

Modest diversification

The 3 months correlation between Crescent and Badger is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Crescent Pt Energy and Badger DAO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Badger DAO and Crescent 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 Crescent Pt Energy are associated (or correlated) with Badger DAO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Badger DAO has no effect on the direction of Crescent i.e., Crescent and Badger DAO go up and down completely randomly.

Pair Corralation between Crescent and Badger DAO

Considering the 90-day investment horizon Crescent Pt Energy is expected to under-perform the Badger DAO. But the stock apears to be less risky and, when comparing its historical volatility, Crescent Pt Energy is 1.59 times less risky than Badger DAO. The stock trades about -0.37 of its potential returns per unit of risk. The Badger DAO is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  380.00  in Badger DAO on June 27, 2022 and sell it today you would earn a total of  27.00  from holding Badger DAO or generate 7.11% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy68.18%
ValuesDaily Returns

Crescent Pt Energy  vs.  Badger DAO

 Performance (%) 
       Timeline  
Crescent Pt Energy 
Crescent Performance
0 of 100
Over the last 90 days Crescent Pt Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in October 2022. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Crescent Price Channel

Badger DAO 
Badger Performance
0 of 100
Over the last 90 days Badger DAO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat weak technical and fundamental indicators, Badger DAO sustained solid returns over the last few months and may actually be approaching a breakup point.

Crescent and Badger DAO Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Crescent and Badger DAO

The main advantage of trading using opposite Crescent and Badger DAO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crescent position performs unexpectedly, Badger DAO 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 Badger DAO will offset losses from the drop in Badger DAO's long position.
Crescent vs. Industrias Bachoco SA
The idea behind Crescent Pt Energy and Badger DAO 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.

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