Correlation Between Internet Computer and COFI
Can any of the company-specific risk be diversified away by investing in both Internet Computer and COFI 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 Internet Computer and COFI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Internet Computer and COFI, you can compare the effects of market volatilities on Internet Computer and COFI 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 Internet Computer with a short position of COFI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Internet Computer and COFI.
Diversification Opportunities for Internet Computer and COFI
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Internet and COFI is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Internet Computer and COFI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COFI and Internet Computer 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 Internet Computer are associated (or correlated) with COFI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COFI has no effect on the direction of Internet Computer i.e., Internet Computer and COFI go up and down completely randomly.
Pair Corralation between Internet Computer and COFI
Assuming the 90 days trading horizon Internet Computer is expected to generate 0.77 times more return on investment than COFI. However, Internet Computer is 1.3 times less risky than COFI. It trades about 0.06 of its potential returns per unit of risk. COFI is currently generating about 0.03 per unit of risk. If you would invest 417.00 in Internet Computer on August 27, 2024 and sell it today you would earn a total of 723.00 from holding Internet Computer or generate 173.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Internet Computer vs. COFI
Performance |
| Timeline |
| Internet Computer |
| COFI |
Internet Computer and COFI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Internet Computer and COFI
The main advantage of trading using opposite Internet Computer and COFI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Internet Computer position performs unexpectedly, COFI 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 COFI will offset losses from the drop in COFI's long position.| Internet Computer vs. Staked Ether | Internet Computer vs. EigenLayer | Internet Computer vs. EOSDAC | Internet Computer vs. BLZ |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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