Correlation Between Polygon and 1inch
Can any of the company-specific risk be diversified away by investing in both Polygon and 1inch 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 Polygon and 1inch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polygon and 1inch, you can compare the effects of market volatilities on Polygon and 1inch 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 Polygon with a short position of 1inch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polygon and 1inch.
Diversification Opportunities for Polygon and 1inch
Almost no diversification
The 3 months correlation between Polygon and 1inch is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Polygon and 1inch in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1inch and Polygon 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 Polygon are associated (or correlated) with 1inch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1inch has no effect on the direction of Polygon i.e., Polygon and 1inch go up and down completely randomly.
Pair Corralation between Polygon and 1inch
Assuming the 90 days trading horizon Polygon is expected to under-perform the 1inch. In addition to that, Polygon is 1.45 times more volatile than 1inch. It trades about -0.28 of its total potential returns per unit of risk. 1inch is currently generating about -0.2 per unit of volatility. If you would invest 30.00 in 1inch on November 28, 2024 and sell it today you would lose (5.00) from holding 1inch or give up 16.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polygon vs. 1inch
Performance |
| Timeline |
| Polygon |
| 1inch |
Polygon and 1inch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polygon and 1inch
The main advantage of trading using opposite Polygon and 1inch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polygon position performs unexpectedly, 1inch 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 1inch will offset losses from the drop in 1inch's long position.The idea behind Polygon and 1inch 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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