Correlation Between Cetus Protocol and CLO
Can any of the company-specific risk be diversified away by investing in both Cetus Protocol and CLO 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 Cetus Protocol and CLO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cetus Protocol and CLO, you can compare the effects of market volatilities on Cetus Protocol and CLO 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 Cetus Protocol with a short position of CLO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cetus Protocol and CLO.
Diversification Opportunities for Cetus Protocol and CLO
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cetus and CLO is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Cetus Protocol and CLO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CLO and Cetus Protocol 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 Cetus Protocol are associated (or correlated) with CLO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CLO has no effect on the direction of Cetus Protocol i.e., Cetus Protocol and CLO go up and down completely randomly.
Pair Corralation between Cetus Protocol and CLO
Assuming the 90 days trading horizon Cetus Protocol is expected to under-perform the CLO. But the crypto coin apears to be less risky and, when comparing its historical volatility, Cetus Protocol is 13.88 times less risky than CLO. The crypto coin trades about -0.44 of its potential returns per unit of risk. The CLO is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 0.07 in CLO on November 8, 2024 and sell it today you would lose (0.06) from holding CLO or give up 82.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cetus Protocol vs. CLO
Performance |
| Timeline |
| Cetus Protocol |
| CLO |
Cetus Protocol and CLO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cetus Protocol and CLO
The main advantage of trading using opposite Cetus Protocol and CLO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cetus Protocol position performs unexpectedly, CLO 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 CLO will offset losses from the drop in CLO's long position.| 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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