Correlation Between Coinbase Global and National Storm
Can any of the company-specific risk be diversified away by investing in both Coinbase Global and National Storm 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 Global and National Storm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coinbase Global and National Storm Recovery, you can compare the effects of market volatilities on Coinbase Global and National Storm 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 Global with a short position of National Storm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coinbase Global and National Storm.
Diversification Opportunities for Coinbase Global and National Storm
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Coinbase and National is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Coinbase Global and National Storm Recovery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Storm Recovery and Coinbase Global 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 Global are associated (or correlated) with National Storm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Storm Recovery has no effect on the direction of Coinbase Global i.e., Coinbase Global and National Storm go up and down completely randomly.
Pair Corralation between Coinbase Global and National Storm
Given the investment horizon of 90 days Coinbase Global is expected to generate 1.11 times more return on investment than National Storm. However, Coinbase Global is 1.11 times more volatile than National Storm Recovery. It trades about 0.18 of its potential returns per unit of risk. National Storm Recovery is currently generating about -0.33 per unit of risk. If you would invest 21,610 in Coinbase Global on August 29, 2024 and sell it today you would earn a total of 7,719 from holding Coinbase Global or generate 35.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coinbase Global vs. National Storm Recovery
Performance |
| Timeline |
| Coinbase Global |
| National Storm Recovery |
Coinbase Global and National Storm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coinbase Global and National Storm
The main advantage of trading using opposite Coinbase Global and National Storm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coinbase Global position performs unexpectedly, National Storm 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 National Storm will offset losses from the drop in National Storm's long position.| Coinbase Global vs. Moodys | Coinbase Global vs. MSCI Inc | Coinbase Global vs. Intercontinental Exchange | Coinbase Global vs. CME Group |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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