Correlation Between Badger DAO and Axie Infinity

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

Diversification Opportunities for Badger DAO and Axie Infinity

0.86
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Badger and Axie Infinity is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Badger DAO and Axie Infinity Shards in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axie Infinity Shards and Badger DAO 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 Badger DAO are associated (or correlated) with Axie Infinity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axie Infinity Shards has no effect on the direction of Badger DAO i.e., Badger DAO and Axie Infinity go up and down completely randomly.

Pair Corralation between Badger DAO and Axie Infinity

Assuming the 90 days trading horizon Badger DAO is expected to generate 1.25 times more return on investment than Axie Infinity. However, Badger DAO is 1.25 times more volatile than Axie Infinity Shards. It trades about -0.08 of its potential returns per unit of risk. Axie Infinity Shards is currently generating about -0.14 per unit of risk. If you would invest  2,613  in Badger DAO on February 23, 2022 and sell it today you would lose (2,035)  from holding Badger DAO or give up 77.88% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy99.35%
ValuesDaily Returns

Badger DAO  vs.  Axie Infinity Shards

 Performance (%) 
      Timeline 
Badger DAO 
Badger Performance
0 of 100
Over the last 90 days Badger DAO 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 technical and 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 Badger DAO investors.

Badger Price Channel

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

Badger DAO and Axie Infinity Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Badger DAO and Axie Infinity

The main advantage of trading using opposite Badger DAO and Axie Infinity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Badger DAO position performs unexpectedly, Axie Infinity 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 Axie Infinity will offset losses from the drop in Axie Infinity's long position.
The idea behind Badger DAO and Axie Infinity Shards 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

Other Complementary Tools

Fundamental Analysis
View fundamental data based on most recent published financial statements
Go
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Go
Fund Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Go
Focused Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Go
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Go
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Go
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Go