Correlation Between Optimism and ApeCoin

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

Diversification Opportunities for Optimism and ApeCoin

0.71
  Correlation Coefficient

Poor diversification

The 3 months correlation between Optimism and ApeCoin is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Optimism and ApeCoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ApeCoin and Optimism 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 Optimism are associated (or correlated) with ApeCoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ApeCoin has no effect on the direction of Optimism i.e., Optimism and ApeCoin go up and down completely randomly.

Pair Corralation between Optimism and ApeCoin

Assuming the 90 days horizon Optimism is expected to generate 1.0 times more return on investment than ApeCoin. However, Optimism is 1.0 times less risky than ApeCoin. It trades about 0.05 of its potential returns per unit of risk. ApeCoin is currently generating about 0.04 per unit of risk. If you would invest  0.00  in Optimism on July 1, 2022 and sell it today you would earn a total of  113.00  from holding Optimism or generate 9.223372036854776E16% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Optimism  vs.  ApeCoin

 Performance (%) 
       Timeline  
Optimism 
Optimism Performance
0 of 100
Over the last 90 days Optimism has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat weak basic indicators, Optimism sustained solid returns over the last few months and may actually be approaching a breakup point.
ApeCoin 
ApeCoin Performance
0 of 100
Over the last 90 days ApeCoin has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat weak basic indicators, ApeCoin sustained solid returns over the last few months and may actually be approaching a breakup point.

Optimism and ApeCoin Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Optimism and ApeCoin

The main advantage of trading using opposite Optimism and ApeCoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optimism position performs unexpectedly, ApeCoin 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 ApeCoin will offset losses from the drop in ApeCoin's long position.
Optimism vs. Staked Ether
The idea behind Optimism and ApeCoin 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.
ApeCoin vs. Staked Ether
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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