Correlation Between Polkadot and FTX Token

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

Diversification Opportunities for Polkadot and FTX Token

0.45
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Polkadot and FTX Token is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Polkadot and FTX Token in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTX 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 FTX Token. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FTX Token has no effect on the direction of Polkadot i.e., Polkadot and FTX Token go up and down completely randomly.

Pair Corralation between Polkadot and FTX Token

Assuming the 90 days trading horizon Polkadot is expected to under-perform the FTX Token. But the crypto coin apears to be less risky and, when comparing its historical volatility, Polkadot is 1.15 times less risky than FTX Token. The crypto coin trades about -0.21 of its potential returns per unit of risk. The FTX Token is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  6,156  in FTX Token on June 27, 2022 and sell it today you would lose (3,693)  from holding FTX Token or give up 59.99% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy12.13%
ValuesDaily Returns

Polkadot  vs.  FTX 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 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

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

FTX Token Price Channel

Polkadot and FTX Token Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Polkadot and FTX Token

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

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