Correlation Between Litecoin and Conflux Network
Can any of the company-specific risk be diversified away by investing in both Litecoin and Conflux Network 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 Litecoin and Conflux Network into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Litecoin and Conflux Network, you can compare the effects of market volatilities on Litecoin and Conflux Network 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 Litecoin with a short position of Conflux Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Litecoin and Conflux Network.
Diversification Opportunities for Litecoin and Conflux Network
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Litecoin and Conflux is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Litecoin and Conflux Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conflux Network and Litecoin 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 Litecoin are associated (or correlated) with Conflux Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conflux Network has no effect on the direction of Litecoin i.e., Litecoin and Conflux Network go up and down completely randomly.
Pair Corralation between Litecoin and Conflux Network
Assuming the 90 days trading horizon Litecoin is expected to generate 1.21 times more return on investment than Conflux Network. However, Litecoin is 1.21 times more volatile than Conflux Network. It trades about 0.19 of its potential returns per unit of risk. Conflux Network is currently generating about 0.03 per unit of risk. If you would invest 10,503 in Litecoin on November 1, 2024 and sell it today you would earn a total of 2,577 from holding Litecoin or generate 24.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Litecoin vs. Conflux Network
Performance |
| Timeline |
| Litecoin |
| Conflux Network |
Litecoin and Conflux Network Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Litecoin and Conflux Network
The main advantage of trading using opposite Litecoin and Conflux Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Litecoin position performs unexpectedly, Conflux Network 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 Conflux Network will offset losses from the drop in Conflux Network's long position.The idea behind Litecoin and Conflux Network 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.| Conflux Network vs. Staked Ether | Conflux Network vs. Phala Network | Conflux Network vs. EigenLayer | Conflux Network 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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