Correlation Between Polkadot and BitMart Token

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

Diversification Opportunities for Polkadot and BitMart Token

-0.38
  Correlation Coefficient

Very good diversification

The 3 months correlation between Polkadot and BitMart is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Polkadot and BitMart Token in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BitMart Token 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 BitMart Token. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BitMart Token has no effect on the direction of Polkadot i.e., Polkadot and BitMart Token go up and down completely randomly.

Pair Corralation between Polkadot and BitMart Token

Assuming the 90 days trading horizon Polkadot is expected to generate 1.22 times more return on investment than BitMart Token. However, Polkadot is 1.22 times more volatile than BitMart Token. It trades about 0.2 of its potential returns per unit of risk. BitMart Token is currently generating about -0.03 per unit of risk. If you would invest  780.00  in Polkadot on May 18, 2022 and sell it today you would earn a total of  151.00  from holding Polkadot or generate 19.36% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Polkadot  vs.  BitMart Token

 Performance (%) 
       Timeline  
Polkadot 
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 somewhat strong basic indicators, Polkadot is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Polkadot Price Channel

BitMart Token 
BitMart Performance
8 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in BitMart Token are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak primary indicators, BitMart Token sustained solid returns over the last few months and may actually be approaching a breakup point.

BitMart Price Channel

Polkadot and BitMart Token Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Polkadot and BitMart Token

The main advantage of trading using opposite Polkadot and BitMart Token positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polkadot position performs unexpectedly, BitMart Token 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 BitMart Token will offset losses from the drop in BitMart Token's long position.
The idea behind Polkadot and BitMart Token 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.
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.

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