Correlation Between Cardano and Moonbeam
Can any of the company-specific risk be diversified away by investing in both Cardano and Moonbeam 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 Cardano and Moonbeam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardano and Moonbeam, you can compare the effects of market volatilities on Cardano and Moonbeam 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 Cardano with a short position of Moonbeam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardano and Moonbeam.
Diversification Opportunities for Cardano and Moonbeam
Almost no diversification
The 3 months correlation between Cardano and Moonbeam is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Cardano and Moonbeam in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moonbeam and Cardano 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 Cardano are associated (or correlated) with Moonbeam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moonbeam has no effect on the direction of Cardano i.e., Cardano and Moonbeam go up and down completely randomly.
Pair Corralation between Cardano and Moonbeam
Assuming the 90 days trading horizon Cardano is expected to generate 1.06 times more return on investment than Moonbeam. However, Cardano is 1.06 times more volatile than Moonbeam. It trades about 0.38 of its potential returns per unit of risk. Moonbeam is currently generating about 0.21 per unit of risk. If you would invest 35.00 in Cardano on August 30, 2024 and sell it today you would earn a total of 66.00 from holding Cardano or generate 188.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cardano vs. Moonbeam
Performance |
| Timeline |
| Cardano |
| Moonbeam |
Cardano and Moonbeam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardano and Moonbeam
The main advantage of trading using opposite Cardano and Moonbeam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardano position performs unexpectedly, Moonbeam 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 Moonbeam will offset losses from the drop in Moonbeam's long position.The idea behind Cardano and Moonbeam 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 the Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |