Correlation Between EOSDAC and Celestia
Can any of the company-specific risk be diversified away by investing in both EOSDAC and Celestia 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 EOSDAC and Celestia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EOSDAC and Celestia, you can compare the effects of market volatilities on EOSDAC and Celestia 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 EOSDAC with a short position of Celestia. Check out your portfolio center. Please also check ongoing floating volatility patterns of EOSDAC and Celestia.
Diversification Opportunities for EOSDAC and Celestia
Very poor diversification
The 3 months correlation between EOSDAC and Celestia is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding EOSDAC and Celestia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celestia and EOSDAC 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 EOSDAC are associated (or correlated) with Celestia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celestia has no effect on the direction of EOSDAC i.e., EOSDAC and Celestia go up and down completely randomly.
Pair Corralation between EOSDAC and Celestia
Assuming the 90 days trading horizon EOSDAC is expected to under-perform the Celestia. In addition to that, EOSDAC is 1.01 times more volatile than Celestia. It trades about -0.16 of its total potential returns per unit of risk. Celestia is currently generating about 0.09 per unit of volatility. If you would invest 282.00 in Celestia on December 8, 2024 and sell it today you would earn a total of 28.00 from holding Celestia or generate 9.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
EOSDAC vs. Celestia
Performance |
| Timeline |
| EOSDAC |
| Celestia |
EOSDAC and Celestia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EOSDAC and Celestia
The main advantage of trading using opposite EOSDAC and Celestia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EOSDAC position performs unexpectedly, Celestia 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 Celestia will offset losses from the drop in Celestia's long position.The idea behind EOSDAC and Celestia 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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