Correlation Between Maverick Protocol and KMD

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Can any of the company-specific risk be diversified away by investing in both Maverick Protocol and KMD 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 KMD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maverick Protocol and KMD, you can compare the effects of market volatilities on Maverick Protocol and KMD 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 KMD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maverick Protocol and KMD.

Diversification Opportunities for Maverick Protocol and KMD

MaverickKMDDiversified AwayMaverickKMDDiversified Away100%
0.97
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Maverick and KMD is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Maverick Protocol and KMD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KMD 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 KMD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KMD has no effect on the direction of Maverick Protocol i.e., Maverick Protocol and KMD go up and down completely randomly.

Pair Corralation between Maverick Protocol and KMD

Assuming the 90 days trading horizon Maverick Protocol is expected to under-perform the KMD. In addition to that, Maverick Protocol is 1.39 times more volatile than KMD. It trades about -0.25 of its total potential returns per unit of risk. KMD is currently generating about -0.16 per unit of volatility. If you would invest  25.00  in KMD on November 23, 2024 and sell it today you would lose (5.00) from holding KMD or give up 20.0% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Maverick Protocol  vs.  KMD

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -60-40-200204060
JavaScript chart by amCharts 3.21.15MAV KMD
       Timeline  
Maverick Protocol 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Maverick Protocol has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's basic indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for Maverick Protocol shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.10.150.20.250.3
KMD 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days KMD has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for KMD shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.20.250.30.350.40.45

Maverick Protocol and KMD Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-13.05-9.77-6.5-3.22-0.05462.825.798.7611.7214.69 0.0070.0080.0090.010
JavaScript chart by amCharts 3.21.15MAV KMD
       Returns  

Pair Trading with Maverick Protocol and KMD

The main advantage of trading using opposite Maverick Protocol and KMD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maverick Protocol position performs unexpectedly, KMD 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 KMD will offset losses from the drop in KMD's long position.
The idea behind Maverick Protocol and KMD 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.
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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 CEOs Directory module to screen CEOs from public companies around the world.

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