Correlation Between Axie Infinity and Cosmos

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Axie Infinity and Cosmos 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 Cosmos 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 Cosmos, you can compare the effects of market volatilities on Axie Infinity and Cosmos 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 Cosmos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axie Infinity and Cosmos.

Diversification Opportunities for Axie Infinity and Cosmos

0.88
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Axie Infinity and Cosmos is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Axie Infinity Shards and Cosmos in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Cosmos 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 Cosmos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cosmos has no effect on the direction of Axie Infinity i.e., Axie Infinity and Cosmos go up and down completely randomly.

Pair Corralation between Axie Infinity and Cosmos

Assuming the 90 days trading horizon Axie Infinity Shards is expected to under-perform the Cosmos. 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 Cosmos. The crypto coin trades about -0.14 of its potential returns per unit of risk. The Cosmos is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  3,431  in Cosmos on February 17, 2022 and sell it today you would lose (2,276)  from holding Cosmos or give up 66.34% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy99.33%
ValuesDaily Returns

Axie Infinity Shards  vs.  Cosmos

 Performance (%) 
      Timeline 
Axie Infinity Shards 
Axie Infinity Performance
0 of 100
Over the last 90 days Axie Infinity Shards 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 Axie Infinity Shards investors.

Axie Infinity Price Channel

Cosmos 
Cosmos Performance
0 of 100
Over the last 90 days Cosmos 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 Cosmos investors.

Cosmos Price Channel

Axie Infinity and Cosmos Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Axie Infinity and Cosmos

The main advantage of trading using opposite Axie Infinity and Cosmos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axie Infinity position performs unexpectedly, Cosmos 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 Cosmos will offset losses from the drop in Cosmos' long position.
The idea behind Axie Infinity Shards and Cosmos 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 Stock Screener module to find equities using custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

Other Complementary Tools

Probability Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
Go
Fund Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Go
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Go
Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Go
Commodity Channel Index
Use Commodity Channel Index to analyze current equity momentum
Go
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Go
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Go
Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
Go
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Go
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Go
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Go
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Go