Correlation Between Magic Eden and Phala Network
Can any of the company-specific risk be diversified away by investing in both Magic Eden and Phala 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 Magic Eden and Phala Network into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magic Eden and Phala Network, you can compare the effects of market volatilities on Magic Eden and Phala 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 Magic Eden with a short position of Phala Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magic Eden and Phala Network.
Diversification Opportunities for Magic Eden and Phala Network
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Magic and Phala is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Magic Eden and Phala Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phala Network and Magic Eden 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 Magic Eden are associated (or correlated) with Phala Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phala Network has no effect on the direction of Magic Eden i.e., Magic Eden and Phala Network go up and down completely randomly.
Pair Corralation between Magic Eden and Phala Network
Assuming the 90 days horizon Magic Eden is expected to under-perform the Phala Network. But the crypto coin apears to be less risky and, when comparing its historical volatility, Magic Eden is 1.64 times less risky than Phala Network. The crypto coin trades about -0.31 of its potential returns per unit of risk. The Phala Network is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest 35.00 in Phala Network on November 4, 2024 and sell it today you would lose (15.00) from holding Phala Network or give up 42.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magic Eden vs. Phala Network
Performance |
| Timeline |
| Magic Eden |
| Phala Network |
Magic Eden and Phala Network Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magic Eden and Phala Network
The main advantage of trading using opposite Magic Eden and Phala Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magic Eden position performs unexpectedly, Phala 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 Phala Network will offset losses from the drop in Phala Network's long position.| Magic Eden vs. Magic Internet Money | Magic Eden vs. Staked Ether | Magic Eden vs. Phala Network | Magic Eden vs. EigenLayer |
| Phala Network vs. Staked Ether | Phala Network vs. EigenLayer | Phala Network vs. EOSDAC | Phala Network vs. BLZ |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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