Correlation Between Conflux Network and IOTA
Can any of the company-specific risk be diversified away by investing in both Conflux Network and IOTA 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 Conflux Network and IOTA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Conflux Network and IOTA, you can compare the effects of market volatilities on Conflux Network and IOTA 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 Conflux Network with a short position of IOTA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Conflux Network and IOTA.
Diversification Opportunities for Conflux Network and IOTA
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Conflux and IOTA is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Conflux Network and IOTA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IOTA and Conflux Network 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 Conflux Network are associated (or correlated) with IOTA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IOTA has no effect on the direction of Conflux Network i.e., Conflux Network and IOTA go up and down completely randomly.
Pair Corralation between Conflux Network and IOTA
Assuming the 90 days trading horizon Conflux Network is expected to generate 3.16 times less return on investment than IOTA. But when comparing it to its historical volatility, Conflux Network is 2.02 times less risky than IOTA. It trades about 0.21 of its potential returns per unit of risk. IOTA is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 14.00 in IOTA on September 13, 2024 and sell it today you would earn a total of 26.00 from holding IOTA or generate 185.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Conflux Network vs. IOTA
Performance |
| Timeline |
| Conflux Network |
| IOTA |
Conflux Network and IOTA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Conflux Network and IOTA
The main advantage of trading using opposite Conflux Network and IOTA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Conflux Network position performs unexpectedly, IOTA 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 IOTA will offset losses from the drop in IOTA's long position.| Conflux Network vs. Bitcoin | Conflux Network vs. Dogecoin | Conflux Network vs. Bitcoin Cash | Conflux Network vs. Litecoin |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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