Correlation Between Chainlink and KIN
Can any of the company-specific risk be diversified away by investing in both Chainlink and KIN 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 Chainlink and KIN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chainlink and KIN, you can compare the effects of market volatilities on Chainlink and KIN 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 Chainlink with a short position of KIN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chainlink and KIN.
Diversification Opportunities for Chainlink and KIN
Very good diversification
The 3 months correlation between Chainlink and KIN is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Chainlink and KIN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KIN and Chainlink 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 Chainlink are associated (or correlated) with KIN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KIN has no effect on the direction of Chainlink i.e., Chainlink and KIN go up and down completely randomly.
Pair Corralation between Chainlink and KIN
Assuming the 90 days trading horizon Chainlink is expected to generate 1.09 times more return on investment than KIN. However, Chainlink is 1.09 times more volatile than KIN. It trades about 0.54 of its potential returns per unit of risk. KIN is currently generating about 0.09 per unit of risk. If you would invest 1,083 in Chainlink on September 4, 2024 and sell it today you would earn a total of 1,413 from holding Chainlink or generate 130.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chainlink vs. KIN
Performance |
| Timeline |
| Chainlink |
| KIN |
Chainlink and KIN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chainlink and KIN
The main advantage of trading using opposite Chainlink and KIN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chainlink position performs unexpectedly, KIN 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 KIN will offset losses from the drop in KIN's long position.The idea behind Chainlink and KIN 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |