Correlation Between Solana and Beta Finance

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Solana and Beta Finance 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 Solana and Beta Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solana and Beta Finance, you can compare the effects of market volatilities on Solana and Beta Finance 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 Solana with a short position of Beta Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solana and Beta Finance.

Diversification Opportunities for Solana and Beta Finance

0.53
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Solana and Beta Finance is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Solana and Beta Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beta Finance and Solana 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 Solana are associated (or correlated) with Beta Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beta Finance has no effect on the direction of Solana i.e., Solana and Beta Finance go up and down completely randomly.

Pair Corralation between Solana and Beta Finance

Assuming the 90 days trading horizon Solana is expected to under-perform the Beta Finance. But the crypto coin apears to be less risky and, when comparing its historical volatility, Solana is 1.49 times less risky than Beta Finance. The crypto coin trades about -0.1 of its potential returns per unit of risk. The Beta Finance is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  40.00  in Beta Finance on May 18, 2022 and sell it today you would lose (25.00)  from holding Beta Finance or give up 62.5% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Solana  vs.  Beta Finance

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

Solana Price Channel

Beta Finance 
Beta Finance Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Beta Finance are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Beta Finance sustained solid returns over the last few months and may actually be approaching a breakup point.

Beta Finance Price Channel

Solana and Beta Finance Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Solana and Beta Finance

The main advantage of trading using opposite Solana and Beta Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solana position performs unexpectedly, Beta Finance 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 Beta Finance will offset losses from the drop in Beta Finance's long position.
The idea behind Solana and Beta Finance 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.

Other Complementary Tools

Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Go
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Go
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Go
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Go
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Go
Content Syndication
Quickly integrate customizable finance content to your own investment portal
Go
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Go
Risk-Return Analysis
View associations between returns expected from investment and the risk you assume
Go
Content Syndication
Quickly integrate customizable finance content to your own investment portal
Go