Correlation Between AEON and Cetus Protocol
Can any of the company-specific risk be diversified away by investing in both AEON and Cetus Protocol 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 AEON and Cetus Protocol into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AEON and Cetus Protocol, you can compare the effects of market volatilities on AEON and Cetus Protocol 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 AEON with a short position of Cetus Protocol. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEON and Cetus Protocol.
Diversification Opportunities for AEON and Cetus Protocol
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between AEON and Cetus is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding AEON and Cetus Protocol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cetus Protocol and AEON 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 AEON are associated (or correlated) with Cetus Protocol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cetus Protocol has no effect on the direction of AEON i.e., AEON and Cetus Protocol go up and down completely randomly.
Pair Corralation between AEON and Cetus Protocol
Assuming the 90 days trading horizon AEON is expected to generate 0.28 times more return on investment than Cetus Protocol. However, AEON is 3.52 times less risky than Cetus Protocol. It trades about 0.01 of its potential returns per unit of risk. Cetus Protocol is currently generating about -0.44 per unit of risk. If you would invest 24.00 in AEON on November 8, 2024 and sell it today you would earn a total of 0.00 from holding AEON or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AEON vs. Cetus Protocol
Performance |
| Timeline |
| AEON |
| Cetus Protocol |
AEON and Cetus Protocol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AEON and Cetus Protocol
The main advantage of trading using opposite AEON and Cetus Protocol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEON position performs unexpectedly, Cetus Protocol 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 Cetus Protocol will offset losses from the drop in Cetus Protocol's long position.The idea behind AEON and Cetus Protocol 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.| Cetus Protocol vs. XRP | Cetus Protocol vs. Solana | Cetus Protocol vs. Sui | Cetus Protocol vs. Staked Ether |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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