Correlation Between Polkadot and SingularityNET

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

Diversification Opportunities for Polkadot and SingularityNET

  Correlation Coefficient

Poor diversification

The 3 months correlation between Polkadot and SingularityNET is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Polkadot and SingularityNET in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SingularityNET and Polkadot 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 Polkadot 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 Polkadot i.e., Polkadot and SingularityNET go up and down completely randomly.

Pair Corralation between Polkadot and SingularityNET

Assuming the 90 days trading horizon Polkadot is expected to under-perform the SingularityNET. But the crypto coin apears to be less risky and, when comparing its historical volatility, Polkadot is 4.27 times less risky than SingularityNET. The crypto coin trades about -0.22 of its potential returns per unit of risk. The SingularityNET is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  4.37  in SingularityNET on July 1, 2022 and sell it today you would earn a total of  0.35  from holding SingularityNET or generate 8.01% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
ValuesDaily Returns

Polkadot  vs.  SingularityNET

 Performance (%) 
Polkadot Performance
0 of 100
Over the last 90 days Polkadot 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 basic indicators remain somewhat strong which may send shares a bit higher in October 2022. The current disturbance may also be a sign of long term up-swing for Polkadot investors.

Polkadot 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

Polkadot and SingularityNET Volatility Contrast

   Predicted Return Density   

Pair Trading with Polkadot and SingularityNET

The main advantage of trading using opposite Polkadot and SingularityNET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polkadot 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.
Polkadot vs. XRP
Polkadot vs. Solana
Polkadot vs. Chainlink
Polkadot vs. Polygon
The idea behind Polkadot 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.
SingularityNET vs. XRP
SingularityNET vs. Solana
SingularityNET vs. Polkadot
SingularityNET 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.

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