Correlation Between Dai and Coin98

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Can any of the company-specific risk be diversified away by investing in both Dai and Coin98 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 Coin98 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dai and Coin98, you can compare the effects of market volatilities on Dai and Coin98 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 Coin98. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dai and Coin98.

Diversification Opportunities for Dai and Coin98

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Dai and Coin98 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Dai and Coin98 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coin98 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 Coin98. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coin98 has no effect on the direction of Dai i.e., Dai and Coin98 go up and down completely randomly.

Pair Corralation between Dai and Coin98

Assuming the 90 days trading horizon Dai is not expected to generate positive returns. However, Dai is 605.34 times less risky than Coin98. It waists most of its returns potential to compensate for thr risk taken. Coin98 is generating about 0.06 per unit of risk. If you would invest  0.00  in Coin98 on May 9, 2022 and sell it today you would earn a total of  61.00  from holding Coin98 or generate 9.223372036854776E16% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy73.48%
ValuesDaily Returns

Dai  vs.  Coin98

 Performance (%) 
       Timeline  
Dai 
Dai Performance
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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

Coin98 
Coin98 Performance
0 of 100
Over the last 90 days Coin98 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Coin98 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Coin98 Price Channel

Dai and Coin98 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Dai and Coin98

The main advantage of trading using opposite Dai and Coin98 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dai position performs unexpectedly, Coin98 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 Coin98 will offset losses from the drop in Coin98's long position.
The idea behind Dai and Coin98 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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