Correlation Between Badger DAO and Centrality Token

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

Diversification Opportunities for Badger DAO and Centrality Token

0.58
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Badger and Centrality is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Badger DAO and Centrality Token in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Centrality Token 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 Centrality Token. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centrality Token has no effect on the direction of Badger DAO i.e., Badger DAO and Centrality Token go up and down completely randomly.

Pair Corralation between Badger DAO and Centrality Token

Assuming the 90 days trading horizon Badger DAO is expected to under-perform the Centrality Token. But the crypto coin apears to be less risky and, when comparing its historical volatility, Badger DAO is 2.48 times less risky than Centrality Token. The crypto coin trades about -0.11 of its potential returns per unit of risk. The Centrality Token is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  5.98  in Centrality Token on February 16, 2022 and sell it today you would earn a total of  1.23  from holding Centrality Token or generate 20.57% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy99.33%
ValuesDaily Returns

Badger DAO  vs.  Centrality Token

 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

Centrality Token 
Centrality Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Centrality Token are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Centrality Token sustained solid returns over the last few months and may actually be approaching a breakup point.

Centrality Price Channel

Badger DAO and Centrality Token Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Badger DAO and Centrality Token

The main advantage of trading using opposite Badger DAO and Centrality Token positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Badger DAO position performs unexpectedly, Centrality Token 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 Centrality Token will offset losses from the drop in Centrality Token's long position.
The idea behind Badger DAO and Centrality Token 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

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