# Correlation Between Axie Infinity and Alpha Finance

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

## Diversification Opportunities for Axie Infinity and Alpha Finance

0.72 | Correlation Coefficient |

### Poor diversification

The 3 months correlation between Axie Infinity and Alpha is

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

Assuming the 90 days trading horizon Axie Infinity Shards is expected to under-perform the Alpha Finance. But the crypto coin apears to be less risky and, when comparing its historical volatility, Axie Infinity Shards is 1.12 times less risky than Alpha Finance. The crypto coin trades about -0.2 of its potential returns per unit of risk. The Alpha Finance Lab is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest

**95.00**in Alpha Finance Lab on**February 27, 2022**and sell it today you would**lose (80.00)**from holding Alpha Finance Lab or give up**84.21%**of portfolio value over**90**days.Time Period | 3 Months [change] |

Direction | Moves Together |

Strength | Significant |

Accuracy | 99.23% |

Values | Daily Returns |

## Axie Infinity Shards vs. Alpha Finance Lab

Performance (%) |

Timeline |

Axie Infinity Shards |

Alpha Finance Lab |

## Axie Infinity and Alpha Finance Volatility Contrast

Predicted Return Density |

Returns |

## Pair Trading with Axie Infinity and Alpha Finance

The main advantage of trading using opposite Axie Infinity and Alpha Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axie Infinity position performs unexpectedly, Alpha Finance 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 Alpha Finance will offset losses from the drop in Alpha Finance's long position.## Axie Infinity Shards

### Pair trading matchups for Axie Infinity

## Alpha Finance Lab

### Pair trading matchups for Alpha Finance

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.

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