Correlation Between FTX Token and Badger DAO

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

Diversification Opportunities for FTX Token and Badger DAO

0.52
  Correlation Coefficient

Very weak diversification

The 3 months correlation between FTX Token and Badger is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding FTX Token and Badger DAO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Badger DAO and FTX Token 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 FTX Token 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 FTX Token i.e., FTX Token and Badger DAO go up and down completely randomly.

Pair Corralation between FTX Token and Badger DAO

Assuming the 90 days trading horizon FTX Token is expected to generate 0.65 times more return on investment than Badger DAO. However, FTX Token is 1.53 times less risky than Badger DAO. It trades about -0.04 of its potential returns per unit of risk. Badger DAO is currently generating about -0.09 per unit of risk. If you would invest  5,804  in FTX Token on May 10, 2022 and sell it today you would lose (2,764)  from holding FTX Token or give up 47.62% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

FTX Token  vs.  Badger DAO

 Performance (%) 
       Timeline  
FTX Token 
FTX Token Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in FTX Token are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, FTX Token may actually be approaching a critical reversion point that can send shares even higher in September 2022.

FTX Token Price Channel

Badger DAO 
Badger Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Badger DAO are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

Badger Price Channel

FTX Token and Badger DAO Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with FTX Token and Badger DAO

The main advantage of trading using opposite FTX Token and Badger DAO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTX Token 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.
The idea behind FTX Token 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.
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

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