Correlation Between Chainlink and FTX Token

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

Diversification Opportunities for Chainlink and FTX Token

-0.14
  Correlation Coefficient

Good diversification

The 1 month correlation between Chainlink and FTX Token is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Chainlink and FTX Token in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTX Token and Chainlink 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 Chainlink 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 Chainlink i.e., Chainlink and FTX Token go up and down completely randomly.

Pair Corralation between Chainlink and FTX Token

Assuming the 90 days trading horizon Chainlink is expected to under-perform the FTX Token. In addition to that, Chainlink is 1.32 times more volatile than FTX Token. It trades about -0.05 of its total potential returns per unit of risk. FTX Token is currently generating about -0.06 per unit of volatility. If you would invest  6,156  in FTX Token on July 2, 2022 and sell it today you would lose (3,736)  from holding FTX Token or give up 60.69% of portfolio value over 90 days.
Time Period1 Month [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Chainlink  vs.  FTX Token

 Performance (%) 
       Timeline  
Chainlink 
Chainlink Performance
10 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Chainlink are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Chainlink sustained solid returns over the last few months and may actually be approaching a breakup point.

Chainlink 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 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 FTX Token investors.

FTX Token Price Channel

Chainlink and FTX Token Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Chainlink and FTX Token

The main advantage of trading using opposite Chainlink and FTX Token positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chainlink 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.
Chainlink vs. XRP
Chainlink vs. Solana
Chainlink vs. Polkadot
Chainlink vs. Polygon
The idea behind Chainlink 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. 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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