Correlation Between Arbitrum and Mask Network
Can any of the company-specific risk be diversified away by investing in both Arbitrum and Mask Network 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 Arbitrum and Mask Network into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arbitrum and Mask Network, you can compare the effects of market volatilities on Arbitrum and Mask Network 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 Arbitrum with a short position of Mask Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arbitrum and Mask Network.
Diversification Opportunities for Arbitrum and Mask Network
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Arbitrum and Mask is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Arbitrum and Mask Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mask Network and Arbitrum 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 Arbitrum are associated (or correlated) with Mask Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mask Network has no effect on the direction of Arbitrum i.e., Arbitrum and Mask Network go up and down completely randomly.
Pair Corralation between Arbitrum and Mask Network
Assuming the 90 days trading horizon Arbitrum is expected to under-perform the Mask Network. In addition to that, Arbitrum is 2.59 times more volatile than Mask Network. It trades about -0.23 of its total potential returns per unit of risk. Mask Network is currently generating about 0.19 per unit of volatility. If you would invest 208.00 in Mask Network on November 28, 2024 and sell it today you would earn a total of 19.00 from holding Mask Network or generate 9.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arbitrum vs. Mask Network
Performance |
| Timeline |
| Arbitrum |
| Mask Network |
Arbitrum and Mask Network Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arbitrum and Mask Network
The main advantage of trading using opposite Arbitrum and Mask Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arbitrum position performs unexpectedly, Mask Network 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 Mask Network will offset losses from the drop in Mask Network's long position.The idea behind Arbitrum and Mask Network 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.| Mask Network vs. Staked Ether | Mask Network vs. Phala Network | Mask Network vs. EigenLayer | Mask Network vs. EOSDAC |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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