Correlation Between Kusama and EOSDAC
Can any of the company-specific risk be diversified away by investing in both Kusama and EOSDAC 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 Kusama and EOSDAC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kusama and EOSDAC, you can compare the effects of market volatilities on Kusama and EOSDAC 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 Kusama with a short position of EOSDAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kusama and EOSDAC.
Diversification Opportunities for Kusama and EOSDAC
Very weak diversification
The 3 months correlation between Kusama and EOSDAC is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Kusama and EOSDAC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EOSDAC and Kusama 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 Kusama are associated (or correlated) with EOSDAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EOSDAC has no effect on the direction of Kusama i.e., Kusama and EOSDAC go up and down completely randomly.
Pair Corralation between Kusama and EOSDAC
Assuming the 90 days trading horizon Kusama is expected to under-perform the EOSDAC. But the crypto coin apears to be less risky and, when comparing its historical volatility, Kusama is 1.17 times less risky than EOSDAC. The crypto coin trades about -0.33 of its potential returns per unit of risk. The EOSDAC is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 0.03 in EOSDAC on November 7, 2024 and sell it today you would earn a total of 0.01 from holding EOSDAC or generate 20.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Kusama vs. EOSDAC
Performance |
| Timeline |
| Kusama |
| EOSDAC |
Kusama and EOSDAC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kusama and EOSDAC
The main advantage of trading using opposite Kusama and EOSDAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kusama position performs unexpectedly, EOSDAC 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 EOSDAC will offset losses from the drop in EOSDAC's long position.The idea behind Kusama and EOSDAC 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.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |