Correlation Between Solana and Celer Network

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

Diversification Opportunities for Solana and Celer Network

0.53
  Correlation Coefficient

Very weak diversification

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

Pair Corralation between Solana and Celer Network

Assuming the 90 days trading horizon Solana is expected to generate 1.57 times less return on investment than Celer Network. But when comparing it to its historical volatility, Solana is 1.08 times less risky than Celer Network. It trades about 0.18 of its potential returns per unit of risk. Celer Network is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  1.26  in Celer Network on May 16, 2022 and sell it today you would earn a total of  1.34  from holding Celer Network or generate 106.35% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Solana  vs.  Celer Network

 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

Celer Network 
Celer Performance
8 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Celer Network are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak essential indicators, Celer Network sustained solid returns over the last few months and may actually be approaching a breakup point.

Celer Price Channel

Solana and Celer Network Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Solana and Celer Network

The main advantage of trading using opposite Solana and Celer Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solana position performs unexpectedly, Celer 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 Celer Network will offset losses from the drop in Celer Network's long position.
The idea behind Solana and Celer 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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