Correlation Between Cetus Protocol and Ontology
Can any of the company-specific risk be diversified away by investing in both Cetus Protocol and Ontology 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 Ontology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cetus Protocol and Ontology, you can compare the effects of market volatilities on Cetus Protocol and Ontology 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 Ontology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cetus Protocol and Ontology.
Diversification Opportunities for Cetus Protocol and Ontology
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cetus and Ontology is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Cetus Protocol and Ontology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ontology 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 Ontology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ontology has no effect on the direction of Cetus Protocol i.e., Cetus Protocol and Ontology go up and down completely randomly.
Pair Corralation between Cetus Protocol and Ontology
Assuming the 90 days trading horizon Cetus Protocol is expected to under-perform the Ontology. In addition to that, Cetus Protocol is 1.56 times more volatile than Ontology. It trades about -0.44 of its total potential returns per unit of risk. Ontology is currently generating about -0.17 per unit of volatility. If you would invest 24.00 in Ontology on November 8, 2024 and sell it today you would lose (6.00) from holding Ontology or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cetus Protocol vs. Ontology
Performance |
| Timeline |
| Cetus Protocol |
| Ontology |
Cetus Protocol and Ontology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cetus Protocol and Ontology
The main advantage of trading using opposite Cetus Protocol and Ontology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cetus Protocol position performs unexpectedly, Ontology 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 Ontology will offset losses from the drop in Ontology'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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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