Correlation Between Optimism and Dai

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

Diversification Opportunities for Optimism and Dai

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Optimism and Dai is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Optimism and Dai in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dai 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 Dai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dai has no effect on the direction of Optimism i.e., Optimism and Dai go up and down completely randomly.

Pair Corralation between Optimism and Dai

If you would invest  100.00  in Dai on July 3, 2022 and sell it today you would earn a total of  0.00  from holding Dai or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Optimism  vs.  Dai

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

Optimism Price Channel

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

Dai Price Channel

Optimism and Dai Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Optimism and Dai

The main advantage of trading using opposite Optimism and Dai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optimism position performs unexpectedly, Dai 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 Dai will offset losses from the drop in Dai's long position.
Optimism vs. XRP
Optimism vs. Solana
Optimism vs. Polkadot
Optimism vs. Chainlink
The idea behind Optimism and Dai 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.
Dai vs. XRP
Dai vs. Solana
Dai vs. Polkadot
Dai 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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