Correlation Between Internet Computer and Near
Can any of the company-specific risk be diversified away by investing in both Internet Computer and Near 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 Near into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Internet Computer and Near, you can compare the effects of market volatilities on Internet Computer and Near 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 Near. Check out your portfolio center. Please also check ongoing floating volatility patterns of Internet Computer and Near.
Diversification Opportunities for Internet Computer and Near
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Internet and Near is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Internet Computer and Near in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Near 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 Near. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Near has no effect on the direction of Internet Computer i.e., Internet Computer and Near go up and down completely randomly.
Pair Corralation between Internet Computer and Near
Assuming the 90 days trading horizon Internet Computer is expected to generate 2.28 times less return on investment than Near. But when comparing it to its historical volatility, Internet Computer is 2.21 times less risky than Near. It trades about 0.05 of its potential returns per unit of risk. Near is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 167.00 in Near on August 23, 2024 and sell it today you would earn a total of 418.00 from holding Near or generate 250.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Internet Computer vs. Near
Performance |
| Timeline |
| Internet Computer |
| Near |
Internet Computer and Near Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Internet Computer and Near
The main advantage of trading using opposite Internet Computer and Near positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Internet Computer position performs unexpectedly, Near 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 Near will offset losses from the drop in Near's long position.| Internet Computer vs. Ethereum | Internet Computer vs. Solana | Internet Computer vs. XRP | Internet Computer vs. Sui |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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