Correlation Between Stratis and Near

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

Diversification Opportunities for Stratis and Near

0.74
  Correlation Coefficient

Poor diversification

The 3 months correlation between Stratis and Near is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Stratis and Near in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Near and Stratis 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 Stratis are associated (or correlated) with Near. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Near has no effect on the direction of Stratis i.e., Stratis and Near go up and down completely randomly.

Pair Corralation between Stratis and Near

Assuming the 90 days trading horizon Stratis is expected to generate 0.81 times more return on investment than Near. However, Stratis is 1.23 times less risky than Near. It trades about 0.0 of its potential returns per unit of risk. Near is currently generating about -0.19 per unit of risk. If you would invest  50.00  in Stratis on September 8, 2022 and sell it today you would lose (2.00)  from holding Stratis or give up 4.0% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Stratis  vs.  Near

 Performance (%) 
       Timeline  
Stratis 
Stratis Performance
0 of 100
Over the last 90 days Stratis has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Crypto's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for Stratis investors.

Stratis Price Channel

Near 
Near Performance
0 of 100
Over the last 90 days Near 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 January 2023. The current disturbance may also be a sign of long term up-swing for Near investors.

Near Price Channel

Stratis and Near Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Stratis and Near

The main advantage of trading using opposite Stratis and Near positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stratis position performs unexpectedly, Near 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 Near will offset losses from the drop in Near's long position.
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The idea behind Stratis and Near 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.
Near vs. Ethereum
Near vs. XRP
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Near vs. Polygon
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 Focused Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.

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