Correlation Between BCN and Nervos Network
Can any of the company-specific risk be diversified away by investing in both BCN and Nervos 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 BCN and Nervos Network into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BCN and Nervos Network, you can compare the effects of market volatilities on BCN and Nervos 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 BCN with a short position of Nervos Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of BCN and Nervos Network.
Diversification Opportunities for BCN and Nervos Network
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BCN and Nervos is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding BCN and Nervos Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nervos Network and BCN 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 BCN are associated (or correlated) with Nervos Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nervos Network has no effect on the direction of BCN i.e., BCN and Nervos Network go up and down completely randomly.
Pair Corralation between BCN and Nervos Network
Assuming the 90 days trading horizon BCN is expected to generate 51.71 times more return on investment than Nervos Network. However, BCN is 51.71 times more volatile than Nervos Network. It trades about 0.19 of its potential returns per unit of risk. Nervos Network is currently generating about 0.33 per unit of risk. If you would invest 0.00 in BCN on September 2, 2024 and sell it today you would earn a total of 0.00 from holding BCN or generate 30.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BCN vs. Nervos Network
Performance |
| Timeline |
| BCN |
| Nervos Network |
BCN and Nervos Network Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BCN and Nervos Network
The main advantage of trading using opposite BCN and Nervos Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCN position performs unexpectedly, Nervos 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 Nervos Network will offset losses from the drop in Nervos Network's long position.The idea behind BCN and Nervos 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.| Nervos Network vs. Staked Ether | Nervos Network vs. EigenLayer | Nervos Network vs. EOSDAC | Nervos Network vs. BLZ |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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