Correlation Between Polkadot and Solana

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

Diversification Opportunities for Polkadot and Solana

0.69
  Correlation Coefficient

Poor diversification

The 1 month correlation between Polkadot and Solana is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Polkadot and Solana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solana and Polkadot 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 Polkadot are associated (or correlated) with Solana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solana has no effect on the direction of Polkadot i.e., Polkadot and Solana go up and down completely randomly.

Pair Corralation between Polkadot and Solana

Assuming the 90 days trading horizon Polkadot is expected to generate 0.79 times more return on investment than Solana. However, Polkadot is 1.26 times less risky than Solana. It trades about 0.33 of its potential returns per unit of risk. Solana is currently generating about 0.19 per unit of risk. If you would invest  627.00  in Polkadot on May 11, 2022 and sell it today you would earn a total of  225.00  from holding Polkadot or generate 35.89% return on investment over 90 days.
Time Period1 Month [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Polkadot  vs.  Solana

 Performance (%) 
       Timeline  
Polkadot 
Polkadot Performance
24 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Polkadot are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Polkadot sustained solid returns over the last few months and may actually be approaching a breakup point.

Polkadot Price Channel

Solana 
Solana Performance
14 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Solana are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Solana sustained solid returns over the last few months and may actually be approaching a breakup point.

Solana Price Channel

Polkadot and Solana Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Polkadot and Solana

The main advantage of trading using opposite Polkadot and Solana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polkadot position performs unexpectedly, Solana 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 Solana will offset losses from the drop in Solana's long position.
The idea behind Polkadot and Solana 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 Global Correlations module to find global opportunities by holding instruments from different markets.

Other Complementary Tools

Bond Directory
Find actively traded corporate debentures issued by US companies
Go
Money Managers
Screen money managers from public funds and ETFs managed around the world
Go
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Go
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Go
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Fundamental Analysis
View fundamental data based on most recent published financial statements
Go
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go