Correlation Between Chainlink and XMR
Can any of the company-specific risk be diversified away by investing in both Chainlink and XMR 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 XMR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chainlink and XMR, you can compare the effects of market volatilities on Chainlink and XMR 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 XMR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chainlink and XMR.
Diversification Opportunities for Chainlink and XMR
Good diversification
The 3 months correlation between Chainlink and XMR is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Chainlink and XMR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XMR 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 XMR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XMR has no effect on the direction of Chainlink i.e., Chainlink and XMR go up and down completely randomly.
Pair Corralation between Chainlink and XMR
Assuming the 90 days trading horizon Chainlink is expected to generate 2.94 times more return on investment than XMR. However, Chainlink is 2.94 times more volatile than XMR. It trades about 0.06 of its potential returns per unit of risk. XMR is currently generating about 0.03 per unit of risk. If you would invest 724.00 in Chainlink on August 23, 2024 and sell it today you would earn a total of 771.00 from holding Chainlink or generate 106.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chainlink vs. XMR
Performance |
| Timeline |
| Chainlink |
| XMR |
Chainlink and XMR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chainlink and XMR
The main advantage of trading using opposite Chainlink and XMR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chainlink position performs unexpectedly, XMR 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 XMR will offset losses from the drop in XMR's long position.The idea behind Chainlink and XMR 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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |