Correlation Between Tezos and EOS

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

Diversification Opportunities for Tezos and EOS

0.08
  Correlation Coefficient

Significant diversification

The 3 months correlation between Tezos and EOS is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Tezos and EOS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EOS and Tezos 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 Tezos are associated (or correlated) with EOS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EOS has no effect on the direction of Tezos i.e., Tezos and EOS go up and down completely randomly.

Pair Corralation between Tezos and EOS

Assuming the 90 days trading horizon Tezos is expected to under-perform the EOS. In addition to that, Tezos is 1.03 times more volatile than EOS. It trades about -0.07 of its total potential returns per unit of risk. EOS is currently generating about -0.06 per unit of volatility. If you would invest  467.00  in EOS on July 7, 2022 and sell it today you would lose (347.00)  from holding EOS or give up 74.3% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Tezos  vs.  EOS

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

Tezos Price Channel

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

EOS Price Channel

Tezos and EOS Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Tezos and EOS

The main advantage of trading using opposite Tezos and EOS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tezos position performs unexpectedly, EOS 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 EOS will offset losses from the drop in EOS's long position.
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The idea behind Tezos and EOS 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.
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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 CEO Directory module to screen CEOs from public companies around the world.

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