Correlation Between Chainlink and Coin98

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

Diversification Opportunities for Chainlink and Coin98

0.63
  Correlation Coefficient

Poor diversification

The 3 months correlation between Chainlink and Coin98 is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Chainlink and Coin98 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coin98 and Chainlink 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 Chainlink 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 Chainlink i.e., Chainlink and Coin98 go up and down completely randomly.

Pair Corralation between Chainlink and Coin98

Assuming the 90 days trading horizon Chainlink is expected to under-perform the Coin98. But the crypto coin apears to be less risky and, when comparing its historical volatility, Chainlink is 9.75 times less risky than Coin98. The crypto coin trades about -0.07 of its potential returns per unit of risk. The Coin98 is currently generating about 0.06 of returns per unit of risk over similar time horizon. 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]
DirectionMoves Together 
StrengthSignificant
Accuracy74.91%
ValuesDaily Returns

Chainlink  vs.  Coin98

 Performance (%) 
       Timeline  
Chainlink 
Chainlink Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Chainlink are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Chainlink may actually be approaching a critical reversion point that can send shares even higher in September 2022.

Chainlink 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

Chainlink and Coin98 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Chainlink and Coin98

The main advantage of trading using opposite Chainlink and Coin98 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chainlink 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 Chainlink 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

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