Correlation Between Coinbase Wrapped and Solana
Can any of the company-specific risk be diversified away by investing in both Coinbase Wrapped and Solana 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 Coinbase Wrapped and Solana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coinbase Wrapped Staked and Solana, you can compare the effects of market volatilities on Coinbase Wrapped and Solana 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 Coinbase Wrapped with a short position of Solana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coinbase Wrapped and Solana.
Diversification Opportunities for Coinbase Wrapped and Solana
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Coinbase and Solana is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Coinbase Wrapped Staked and Solana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solana and Coinbase Wrapped 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 Coinbase Wrapped Staked are associated (or correlated) with Solana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solana has no effect on the direction of Coinbase Wrapped i.e., Coinbase Wrapped and Solana go up and down completely randomly.
Pair Corralation between Coinbase Wrapped and Solana
Assuming the 90 days trading horizon Coinbase Wrapped Staked is expected to generate 1.7 times more return on investment than Solana. However, Coinbase Wrapped is 1.7 times more volatile than Solana. It trades about 0.07 of its potential returns per unit of risk. Solana is currently generating about 0.07 per unit of risk. If you would invest 0.00 in Coinbase Wrapped Staked on August 27, 2024 and sell it today you would earn a total of 367,569 from holding Coinbase Wrapped Staked or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coinbase Wrapped Staked vs. Solana
Performance |
| Timeline |
| Coinbase Wrapped Staked |
| Solana |
Coinbase Wrapped and Solana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coinbase Wrapped and Solana
The main advantage of trading using opposite Coinbase Wrapped and Solana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coinbase Wrapped position performs unexpectedly, Solana 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 Solana will offset losses from the drop in Solana's long position.| Coinbase Wrapped vs. Staked Ether | Coinbase Wrapped vs. EigenLayer | Coinbase Wrapped vs. EOSDAC | Coinbase Wrapped 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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