Correlation Between Creditcoin and FTC
Can any of the company-specific risk be diversified away by investing in both Creditcoin and FTC 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 Creditcoin and FTC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Creditcoin and FTC, you can compare the effects of market volatilities on Creditcoin and FTC 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 Creditcoin with a short position of FTC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Creditcoin and FTC.
Diversification Opportunities for Creditcoin and FTC
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Creditcoin and FTC is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Creditcoin and FTC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTC and Creditcoin 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 Creditcoin are associated (or correlated) with FTC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FTC has no effect on the direction of Creditcoin i.e., Creditcoin and FTC go up and down completely randomly.
Pair Corralation between Creditcoin and FTC
Assuming the 90 days trading horizon Creditcoin is expected to generate 3.66 times more return on investment than FTC. However, Creditcoin is 3.66 times more volatile than FTC. It trades about 0.08 of its potential returns per unit of risk. FTC is currently generating about 0.03 per unit of risk. If you would invest 26.00 in Creditcoin on August 31, 2024 and sell it today you would earn a total of 71.00 from holding Creditcoin or generate 273.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Creditcoin vs. FTC
Performance |
| Timeline |
| Creditcoin |
| FTC |
Creditcoin and FTC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Creditcoin and FTC
The main advantage of trading using opposite Creditcoin and FTC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Creditcoin position performs unexpectedly, FTC 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 FTC will offset losses from the drop in FTC's long position.The idea behind Creditcoin and FTC 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |