Correlation Between Maverick Protocol and Kava
Can any of the company-specific risk be diversified away by investing in both Maverick Protocol and Kava 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 Maverick Protocol and Kava into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maverick Protocol and Kava, you can compare the effects of market volatilities on Maverick Protocol and Kava 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 Maverick Protocol with a short position of Kava. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maverick Protocol and Kava.
Diversification Opportunities for Maverick Protocol and Kava
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Maverick and Kava is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Maverick Protocol and Kava in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kava and Maverick Protocol 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 Maverick Protocol are associated (or correlated) with Kava. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kava has no effect on the direction of Maverick Protocol i.e., Maverick Protocol and Kava go up and down completely randomly.
Pair Corralation between Maverick Protocol and Kava
Assuming the 90 days trading horizon Maverick Protocol is expected to generate 1.5 times more return on investment than Kava. However, Maverick Protocol is 1.5 times more volatile than Kava. It trades about 0.53 of its potential returns per unit of risk. Kava is currently generating about 0.72 per unit of risk. If you would invest 14.00 in Maverick Protocol on September 4, 2024 and sell it today you would earn a total of 16.00 from holding Maverick Protocol or generate 114.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maverick Protocol vs. Kava
Performance |
| Timeline |
| Maverick Protocol |
| Kava |
Maverick Protocol and Kava Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maverick Protocol and Kava
The main advantage of trading using opposite Maverick Protocol and Kava positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maverick Protocol position performs unexpectedly, Kava 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 Kava will offset losses from the drop in Kava's long position.| Maverick Protocol vs. XRP | Maverick Protocol vs. Solana | Maverick Protocol vs. Staked Ether | Maverick Protocol vs. Toncoin |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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