Correlation Between Hivemapper and DENT
Can any of the company-specific risk be diversified away by investing in both Hivemapper and DENT 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 Hivemapper and DENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hivemapper and DENT, you can compare the effects of market volatilities on Hivemapper and DENT 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 Hivemapper with a short position of DENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hivemapper and DENT.
Diversification Opportunities for Hivemapper and DENT
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hivemapper and DENT is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Hivemapper and DENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DENT and Hivemapper 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 Hivemapper are associated (or correlated) with DENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DENT has no effect on the direction of Hivemapper i.e., Hivemapper and DENT go up and down completely randomly.
Pair Corralation between Hivemapper and DENT
Assuming the 90 days trading horizon Hivemapper is expected to under-perform the DENT. But the crypto coin apears to be less risky and, when comparing its historical volatility, Hivemapper is 1.16 times less risky than DENT. The crypto coin trades about -0.36 of its potential returns per unit of risk. The DENT is currently generating about -0.3 of returns per unit of risk over similar time horizon. If you would invest 0.13 in DENT on November 8, 2024 and sell it today you would lose (0.05) from holding DENT or give up 39.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hivemapper vs. DENT
Performance |
| Timeline |
| Hivemapper |
| DENT |
Hivemapper and DENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hivemapper and DENT
The main advantage of trading using opposite Hivemapper and DENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hivemapper position performs unexpectedly, DENT 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 DENT will offset losses from the drop in DENT's long position.| Hivemapper vs. Staked Ether | Hivemapper vs. Phala Network | Hivemapper vs. EigenLayer | Hivemapper vs. EOSDAC |
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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