Correlation Between Internet Computer and PRE
Can any of the company-specific risk be diversified away by investing in both Internet Computer and PRE 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 PRE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Internet Computer and PRE, you can compare the effects of market volatilities on Internet Computer and PRE 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 PRE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Internet Computer and PRE.
Diversification Opportunities for Internet Computer and PRE
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Internet and PRE is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Internet Computer and PRE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PRE 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 PRE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PRE has no effect on the direction of Internet Computer i.e., Internet Computer and PRE go up and down completely randomly.
Pair Corralation between Internet Computer and PRE
Assuming the 90 days trading horizon Internet Computer is expected to under-perform the PRE. But the crypto coin apears to be less risky and, when comparing its historical volatility, Internet Computer is 4.56 times less risky than PRE. The crypto coin trades about -0.2 of its potential returns per unit of risk. The PRE is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 0.83 in PRE on November 28, 2024 and sell it today you would earn a total of 0.60 from holding PRE or generate 72.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Internet Computer vs. PRE
Performance |
| Timeline |
| Internet Computer |
| PRE |
Internet Computer and PRE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Internet Computer and PRE
The main advantage of trading using opposite Internet Computer and PRE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Internet Computer position performs unexpectedly, PRE 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 PRE will offset losses from the drop in PRE's long position.| Internet Computer vs. Staked Ether | Internet Computer vs. Phala Network | Internet Computer vs. EigenLayer | Internet Computer 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |