Correlation Between Arweave and Boson Protocol

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

Diversification Opportunities for Arweave and Boson Protocol

0.89
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Arweave and Boson is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Arweave and Boson Protocol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boson Protocol and Arweave 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 Arweave are associated (or correlated) with Boson Protocol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boson Protocol has no effect on the direction of Arweave i.e., Arweave and Boson Protocol go up and down completely randomly.

Pair Corralation between Arweave and Boson Protocol

Assuming the 90 days horizon Arweave is expected to under-perform the Boson Protocol. But the crypto coin apears to be less risky and, when comparing its historical volatility, Arweave is 1.6 times less risky than Boson Protocol. The crypto coin trades about -0.34 of its potential returns per unit of risk. The Boson Protocol is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest  66.00  in Boson Protocol on February 27, 2022 and sell it today you would lose (29.00)  from holding Boson Protocol or give up 43.94% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy95.45%
ValuesDaily Returns

Arweave  vs.  Boson Protocol

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

Arweave Price Channel

Boson Protocol 
Boson Performance
0 of 100
Over the last 90 days Boson Protocol 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 Boson Protocol investors.

Boson Price Channel

Arweave and Boson Protocol Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Arweave and Boson Protocol

The main advantage of trading using opposite Arweave and Boson Protocol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arweave position performs unexpectedly, Boson Protocol 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 Boson Protocol will offset losses from the drop in Boson Protocol's long position.
The idea behind Arweave and Boson Protocol 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..

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