Correlation Between Cardano and Therasense
Can any of the company-specific risk be diversified away by investing in both Cardano and Therasense 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 Therasense into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardano and Therasense, you can compare the effects of market volatilities on Cardano and Therasense 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 Therasense. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardano and Therasense.
Diversification Opportunities for Cardano and Therasense
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cardano and Therasense is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cardano and Therasense in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Therasense 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 Therasense. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Therasense has no effect on the direction of Cardano i.e., Cardano and Therasense go up and down completely randomly.
Pair Corralation between Cardano and Therasense
Assuming the 90 days trading horizon Cardano is expected to generate 0.52 times more return on investment than Therasense. However, Cardano is 1.93 times less risky than Therasense. It trades about 0.08 of its potential returns per unit of risk. Therasense is currently generating about 0.01 per unit of risk. If you would invest 39.00 in Cardano on November 2, 2024 and sell it today you would earn a total of 57.00 from holding Cardano or generate 146.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 60.45% |
| Values | Daily Returns |
Cardano vs. Therasense
Performance |
| Timeline |
| Cardano |
| Therasense |
Cardano and Therasense Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardano and Therasense
The main advantage of trading using opposite Cardano and Therasense positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardano position performs unexpectedly, Therasense 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 Therasense will offset losses from the drop in Therasense's long position.The idea behind Cardano and Therasense 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.| Therasense vs. GB Sciences | Therasense vs. Scisparc | Therasense vs. Creative Medical Technology | Therasense vs. Regen BioPharma |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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