Correlation Between OOKI and Solana
Can any of the company-specific risk be diversified away by investing in both OOKI and Solana 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 OOKI and Solana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OOKI and Solana, you can compare the effects of market volatilities on OOKI and Solana 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 OOKI with a short position of Solana. Check out your portfolio center. Please also check ongoing floating volatility patterns of OOKI and Solana.
Diversification Opportunities for OOKI and Solana
Pay attention - limited upside
The 3 months correlation between OOKI and Solana is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding OOKI and Solana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solana and OOKI 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 OOKI are associated (or correlated) with Solana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solana has no effect on the direction of OOKI i.e., OOKI and Solana go up and down completely randomly.
Pair Corralation between OOKI and Solana
Assuming the 90 days trading horizon OOKI is expected to generate 31.02 times more return on investment than Solana. However, OOKI is 31.02 times more volatile than Solana. It trades about 0.1 of its potential returns per unit of risk. Solana is currently generating about 0.26 per unit of risk. If you would invest 0.13 in OOKI on August 31, 2024 and sell it today you would earn a total of 0.07 from holding OOKI or generate 55.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
OOKI vs. Solana
Performance |
| Timeline |
| OOKI |
| Solana |
OOKI and Solana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OOKI and Solana
The main advantage of trading using opposite OOKI and Solana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OOKI position performs unexpectedly, Solana 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 Solana will offset losses from the drop in Solana's long position.The idea behind OOKI and Solana 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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