Correlation Between Dai and Solana

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

Diversification Opportunities for Dai and Solana

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Dai and Solana is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Dai and Solana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solana and Dai 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 Dai are associated (or correlated) with Solana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solana has no effect on the direction of Dai i.e., Dai and Solana go up and down completely randomly.

Pair Corralation between Dai and Solana

Assuming the 90 days trading horizon Dai is not expected to generate positive returns. However, Dai is 69.49 times less risky than Solana. It waists most of its returns potential to compensate for thr risk taken. Solana is generating about -0.08 per unit of risk. If you would invest  100.00  in Dai on July 8, 2022 and sell it today you would earn a total of  0.00  from holding Dai or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy98.8%
ValuesDaily Returns

Dai  vs.  Solana

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

Dai Price Channel

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

Solana Price Channel

Dai and Solana Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Dai and Solana

The main advantage of trading using opposite Dai and Solana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dai position performs unexpectedly, Solana 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 Solana will offset losses from the drop in Solana's long position.
Dai vs. XRP
Dai vs. Solana
Dai vs. Polkadot
Dai vs. Chainlink
The idea behind Dai and Solana 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.
Solana vs. XRP
Solana vs. Polkadot
Solana vs. Chainlink
Solana 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 Transaction History module to view history of all your transactions and understand their impact on performance.

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