Correlation Between Curve DAO and REDLANG
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By analyzing existing cross correlation between Curve DAO Token and REDLANG, you can compare the effects of market volatilities on Curve DAO and REDLANG 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 Curve DAO with a short position of REDLANG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Curve DAO and REDLANG.
Diversification Opportunities for Curve DAO and REDLANG
Very weak diversification
The 3 months correlation between Curve and REDLANG is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Curve DAO Token and REDLANG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REDLANG and Curve DAO 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 Curve DAO Token are associated (or correlated) with REDLANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REDLANG has no effect on the direction of Curve DAO i.e., Curve DAO and REDLANG go up and down completely randomly.
Pair Corralation between Curve DAO and REDLANG
Assuming the 90 days trading horizon Curve DAO Token is expected to generate 1.47 times more return on investment than REDLANG. However, Curve DAO is 1.47 times more volatile than REDLANG. It trades about 0.43 of its potential returns per unit of risk. REDLANG is currently generating about 0.19 per unit of risk. If you would invest 24.00 in Curve DAO Token on August 25, 2024 and sell it today you would earn a total of 24.00 from holding Curve DAO Token or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Curve DAO Token vs. REDLANG
Performance |
| Timeline |
| Curve DAO Token |
| REDLANG |
Curve DAO and REDLANG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Curve DAO and REDLANG
The main advantage of trading using opposite Curve DAO and REDLANG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Curve DAO position performs unexpectedly, REDLANG 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 REDLANG will offset losses from the drop in REDLANG's long position.The idea behind Curve DAO Token and REDLANG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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