Correlation Between LEO Token and FileCoin
Can any of the company-specific risk be diversified away by investing in both LEO Token and FileCoin 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 LEO Token and FileCoin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LEO Token and FileCoin, you can compare the effects of market volatilities on LEO Token and FileCoin 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 LEO Token with a short position of FileCoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of LEO Token and FileCoin.
Diversification Opportunities for LEO Token and FileCoin
Poor diversification
The 3 months correlation between LEO and FileCoin is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding LEO Token and FileCoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FileCoin and LEO Token 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 LEO Token are associated (or correlated) with FileCoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FileCoin has no effect on the direction of LEO Token i.e., LEO Token and FileCoin go up and down completely randomly.
Pair Corralation between LEO Token and FileCoin
Assuming the 90 days trading horizon LEO Token is expected to generate 0.37 times more return on investment than FileCoin. However, LEO Token is 2.71 times less risky than FileCoin. It trades about 0.07 of its potential returns per unit of risk. FileCoin is currently generating about -0.06 per unit of risk. If you would invest 958.00 in LEO Token on October 23, 2024 and sell it today you would earn a total of 21.00 from holding LEO Token or generate 2.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LEO Token vs. FileCoin
Performance |
| Timeline |
| LEO Token |
| FileCoin |
LEO Token and FileCoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LEO Token and FileCoin
The main advantage of trading using opposite LEO Token and FileCoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LEO Token position performs unexpectedly, FileCoin 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 FileCoin will offset losses from the drop in FileCoin's long position.The idea behind LEO Token and FileCoin 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |