Correlation Between Uniswap Protocol and ApeCoin

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

Diversification Opportunities for Uniswap Protocol and ApeCoin

0.04
  Correlation Coefficient

Significant diversification

The 3 months correlation between Uniswap and ApeCoin is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Uniswap Protocol Token and ApeCoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ApeCoin and Uniswap Protocol 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 Uniswap Protocol Token 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 Uniswap Protocol i.e., Uniswap Protocol and ApeCoin go up and down completely randomly.

Pair Corralation between Uniswap Protocol and ApeCoin

Assuming the 90 days trading horizon Uniswap Protocol is expected to generate 1.66 times less return on investment than ApeCoin. But when comparing it to its historical volatility, Uniswap Protocol Token is 1.15 times less risky than ApeCoin. It trades about 0.07 of its potential returns per unit of risk. ApeCoin is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  475.00  in ApeCoin on July 4, 2022 and sell it today you would earn a total of  49.00  from holding ApeCoin or generate 10.32% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy86.36%
ValuesDaily Returns

Uniswap Protocol Token  vs.  ApeCoin

 Performance (%) 
       Timeline  
Uniswap Protocol Token 
Uniswap Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Uniswap Protocol Token are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Uniswap Protocol sustained solid returns over the last few months and may actually be approaching a breakup point.

Uniswap Price Channel

ApeCoin 
ApeCoin Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in ApeCoin are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, ApeCoin sustained solid returns over the last few months and may actually be approaching a breakup point.

ApeCoin Price Channel

Uniswap Protocol and ApeCoin Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Uniswap Protocol and ApeCoin

The main advantage of trading using opposite Uniswap Protocol and ApeCoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uniswap Protocol 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.
Uniswap Protocol vs. XRP
Uniswap Protocol vs. Solana
Uniswap Protocol vs. Polkadot
Uniswap Protocol vs. Chainlink
The idea behind Uniswap Protocol Token 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. XRP
ApeCoin vs. Solana
ApeCoin vs. Polkadot
ApeCoin 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

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