Correlation Between Dai and BakeryToken

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

Diversification Opportunities for Dai and BakeryToken

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Dai and BakeryToken is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Dai and BakeryToken in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BakeryToken and Dai 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 Dai are associated (or correlated) with BakeryToken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BakeryToken has no effect on the direction of Dai i.e., Dai and BakeryToken go up and down completely randomly.

Pair Corralation between Dai and BakeryToken

If you would invest  30.00  in BakeryToken on May 15, 2022 and sell it today you would earn a total of  5.00  from holding BakeryToken or generate 16.67% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Dai  vs.  BakeryToken

 Performance (%) 
       Timeline  
Dai 
Dai Performance
0 of 100
Over the last 90 days Dai has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Dai is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Dai Price Channel

BakeryToken 
BakeryToken Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in BakeryToken are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward-looking signals, BakeryToken sustained solid returns over the last few months and may actually be approaching a breakup point.

BakeryToken Price Channel

Dai and BakeryToken Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Dai and BakeryToken

The main advantage of trading using opposite Dai and BakeryToken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dai position performs unexpectedly, BakeryToken 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 BakeryToken will offset losses from the drop in BakeryToken's long position.
The idea behind Dai and BakeryToken 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

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