Correlation Between FTX Token and Coin98

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

Diversification Opportunities for FTX Token and Coin98

0.96
  Correlation Coefficient

Almost no diversification

The 3 months correlation between FTX Token and Coin98 is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding FTX Token and Coin98 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coin98 and FTX Token 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 FTX Token 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 FTX Token i.e., FTX Token and Coin98 go up and down completely randomly.

Pair Corralation between FTX Token and Coin98

Assuming the 90 days trading horizon FTX Token is expected to generate 0.92 times more return on investment than Coin98. However, FTX Token is 1.09 times less risky than Coin98. It trades about -0.03 of its potential returns per unit of risk. Coin98 is currently generating about -0.19 per unit of risk. If you would invest  2,705  in FTX Token on April 5, 2022 and sell it today you would lose (248.00)  from holding FTX Token or give up 9.17% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

FTX Token  vs.  Coin98

 Performance (%) 
      Timeline 
FTX Token 
FTX Token Performance
0 of 100
Over the last 90 days FTX Token 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 August 2022. The current disturbance may also be a sign of long term up-swing for FTX Token investors.

FTX Token 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 weak performance in the last few months, the Crypto's basic indicators remain somewhat strong which may send shares a bit higher in August 2022. The current disturbance may also be a sign of long term up-swing for Coin98 investors.

Coin98 Price Channel

FTX Token and Coin98 Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with FTX Token and Coin98

The main advantage of trading using opposite FTX Token and Coin98 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTX Token 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 FTX Token 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

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