Correlation Between EMERCOIN and HC
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By analyzing existing cross correlation between EMERCOIN and HC, you can compare the effects of market volatilities on EMERCOIN and HC 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 EMERCOIN with a short position of HC. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMERCOIN and HC.
Diversification Opportunities for EMERCOIN and HC
Weak diversification
The 3 months correlation between EMERCOIN and HC is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding EMERCOIN and HC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HC and EMERCOIN 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 EMERCOIN are associated (or correlated) with HC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HC has no effect on the direction of EMERCOIN i.e., EMERCOIN and HC go up and down completely randomly.
Pair Corralation between EMERCOIN and HC
Assuming the 90 days trading horizon EMERCOIN is expected to generate 7.95 times more return on investment than HC. However, EMERCOIN is 7.95 times more volatile than HC. It trades about 0.26 of its potential returns per unit of risk. HC is currently generating about 0.0 per unit of risk. If you would invest 0.33 in EMERCOIN on August 25, 2024 and sell it today you would earn a total of 0.66 from holding EMERCOIN or generate 197.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EMERCOIN vs. HC
Performance |
| Timeline |
| EMERCOIN |
| HC |
EMERCOIN and HC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMERCOIN and HC
The main advantage of trading using opposite EMERCOIN and HC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMERCOIN position performs unexpectedly, HC 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 HC will offset losses from the drop in HC's long position.The idea behind EMERCOIN and HC 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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