Correlation Between Alephim and PancakeSwap

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

Diversification Opportunities for Alephim and PancakeSwap

0.07
  Correlation Coefficient

Significant diversification

The 3 months correlation between Alephim and PancakeSwap is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Aleph.im and PancakeSwap in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on PancakeSwap and Alephim 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 Alephim 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 Alephim i.e., Alephim and PancakeSwap go up and down completely randomly.

Pair Corralation between Alephim and PancakeSwap

Assuming the 90 days trading horizon Alephim is expected to generate 1.21 times more return on investment than PancakeSwap. However, Alephim is 1.21 times more volatile than PancakeSwap. It trades about -0.02 of its potential returns per unit of risk. PancakeSwap is currently generating about -0.13 per unit of risk. If you would invest  51.00  in Alephim on February 16, 2022 and sell it today you would lose (24.00)  from holding Alephim or give up 47.06% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy99.33%
ValuesDaily Returns

Aleph.im  vs.  PancakeSwap

 Performance (%) 
      Timeline 
Alephim 
Alephim Performance
0 of 100
Over the last 90 days Alephim 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 basic 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 Alephim investors.

Alephim 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

Alephim and PancakeSwap Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Alephim and PancakeSwap

The main advantage of trading using opposite Alephim and PancakeSwap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alephim 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 Alephim 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.

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