Correlation Between Litecoin and Arweave

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

Diversification Opportunities for Litecoin and Arweave

0.99
  Correlation Coefficient

No risk reduction

The 3 months correlation between Litecoin and Arweave is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Litecoin and Arweave in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arweave and Litecoin 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 Litecoin are associated (or correlated) with Arweave. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arweave has no effect on the direction of Litecoin i.e., Litecoin and Arweave go up and down completely randomly.

Pair Corralation between Litecoin and Arweave

Assuming the 90 days trading horizon Litecoin is expected to generate 0.65 times more return on investment than Arweave. However, Litecoin is 1.53 times less risky than Arweave. It trades about -0.09 of its potential returns per unit of risk. Arweave is currently generating about -0.06 per unit of risk. If you would invest  19,689  in Litecoin on March 28, 2022 and sell it today you would lose (13,804)  from holding Litecoin or give up 70.11% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Litecoin  vs.  Arweave

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

Litecoin Price Channel

Arweave 
Arweave Performance
0 of 100
Over the last 90 days Arweave 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 July 2022. The current disturbance may also be a sign of long term up-swing for Arweave investors.

Arweave Price Channel

Litecoin and Arweave Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Litecoin and Arweave

The main advantage of trading using opposite Litecoin and Arweave positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Litecoin position performs unexpectedly, Arweave 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 Arweave will offset losses from the drop in Arweave's long position.
The idea behind Litecoin and Arweave 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.

Other Complementary Tools

Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Go
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Go
ETF Directory
Find actively traded Exchange Traded Funds (ETF) from around the world
Go
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Go
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
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
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Go
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Go
Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios
Go
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go
Bond Directory
Find actively traded corporate debentures issued by US companies
Go