Correlation Between AdEx and PancakeSwap

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

Diversification Opportunities for AdEx and PancakeSwap

0.61
  Correlation Coefficient

Poor diversification

The 3 months correlation between AdEx and PancakeSwap is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding AdEx and PancakeSwap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PancakeSwap and AdEx 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 AdEx are associated (or correlated) with PancakeSwap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PancakeSwap has no effect on the direction of AdEx i.e., AdEx and PancakeSwap go up and down completely randomly.

Pair Corralation between AdEx and PancakeSwap

Assuming the 90 days trading horizon AdEx is expected to generate 1.83 times more return on investment than PancakeSwap. However, AdEx is 1.83 times more volatile than PancakeSwap. It trades about -0.01 of its potential returns per unit of risk. PancakeSwap is currently generating about -0.12 per unit of risk. If you would invest  56.00  in AdEx on February 21, 2022 and sell it today you would lose (32.00)  from holding AdEx or give up 57.14% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy96.08%
ValuesDaily Returns

AdEx  vs.  PancakeSwap

 Performance (%) 
      Timeline 
AdEx 
AdEx Performance
0 of 100
Over the last 90 days AdEx has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Crypto's fundamental indicators remain somewhat strong which may send shares a bit higher in June 2022. The current disturbance may also be a sign of long term up-swing for AdEx investors.

AdEx Price Channel

PancakeSwap 
PancakeSwap Performance
0 of 100
Over the last 90 days PancakeSwap has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Crypto's forward-looking signals remain somewhat strong which may send shares a bit higher in June 2022. The current disturbance may also be a sign of long term up-swing for PancakeSwap investors.

PancakeSwap Price Channel

AdEx and PancakeSwap Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with AdEx and PancakeSwap

The main advantage of trading using opposite AdEx and PancakeSwap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AdEx position performs unexpectedly, PancakeSwap 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 PancakeSwap will offset losses from the drop in PancakeSwap's long position.
The idea behind AdEx and PancakeSwap 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 Watchlist Optimization module to optimize watchlists to build efficient portfolio or rebalance existing positions based on mean-variance optimization algorithm.

Other Complementary Tools

Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Go
Commodity Channel Index
Use Commodity Channel Index to analyze current equity momentum
Go
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Go
Analyst Recommendations
Analyst recommendations and target price estimates broken down by several categories
Go
Risk-Return Analysis
View associations between returns expected from investment and the risk you assume
Go
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Go