Correlation Between FTX Token and Celsius Network

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

Diversification Opportunities for FTX Token and Celsius Network

0.61
  Correlation Coefficient

Poor diversification

The 3 months correlation between FTX Token and Celsius is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding FTX Token and Celsius Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celsius Network 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 Celsius Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celsius Network has no effect on the direction of FTX Token i.e., FTX Token and Celsius Network go up and down completely randomly.

Pair Corralation between FTX Token and Celsius Network

Assuming the 90 days trading horizon FTX Token is expected to generate 2.37 times less return on investment than Celsius Network. But when comparing it to its historical volatility, FTX Token is 1.84 times less risky than Celsius Network. It trades about 0.34 of its potential returns per unit of risk. Celsius Network is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest  71.00  in Celsius Network on May 11, 2022 and sell it today you would earn a total of  47.00  from holding Celsius Network or generate 66.2% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy90.48%
ValuesDaily Returns

FTX Token  vs.  Celsius Network

 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

Celsius Network 
Celsius Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Celsius Network are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Celsius Network sustained solid returns over the last few months and may actually be approaching a breakup point.

Celsius Price Channel

FTX Token and Celsius Network Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with FTX Token and Celsius Network

The main advantage of trading using opposite FTX Token and Celsius Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTX Token position performs unexpectedly, Celsius Network 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 Celsius Network will offset losses from the drop in Celsius Network's long position.
The idea behind FTX Token and Celsius Network 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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