Correlation Between Near and FileCoin
Can any of the company-specific risk be diversified away by investing in both Near and FileCoin 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 Near and FileCoin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Near and FileCoin, you can compare the effects of market volatilities on Near and FileCoin 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 Near with a short position of FileCoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Near and FileCoin.
Diversification Opportunities for Near and FileCoin
Almost no diversification
The 3 months correlation between Near and FileCoin is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Near and FileCoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FileCoin and Near 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 Near are associated (or correlated) with FileCoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FileCoin has no effect on the direction of Near i.e., Near and FileCoin go up and down completely randomly.
Pair Corralation between Near and FileCoin
Assuming the 90 days trading horizon Near is expected to under-perform the FileCoin. In addition to that, Near is 1.17 times more volatile than FileCoin. It trades about -0.06 of its total potential returns per unit of risk. FileCoin is currently generating about -0.06 per unit of volatility. If you would invest 546.00 in FileCoin on October 23, 2024 and sell it today you would lose (46.00) from holding FileCoin or give up 8.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Near vs. FileCoin
Performance |
| Timeline |
| Near |
| FileCoin |
Near and FileCoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Near and FileCoin
The main advantage of trading using opposite Near and FileCoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Near position performs unexpectedly, FileCoin 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 FileCoin will offset losses from the drop in FileCoin's long position.The idea behind Near and FileCoin 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |