Correlation Between Optimism and Maverick Protocol
Can any of the company-specific risk be diversified away by investing in both Optimism and Maverick Protocol 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 Optimism and Maverick Protocol into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Optimism and Maverick Protocol, you can compare the effects of market volatilities on Optimism and Maverick Protocol 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 Optimism with a short position of Maverick Protocol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optimism and Maverick Protocol.
Diversification Opportunities for Optimism and Maverick Protocol
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Optimism and Maverick is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Optimism and Maverick Protocol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maverick Protocol and Optimism 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 Optimism are associated (or correlated) with Maverick Protocol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maverick Protocol has no effect on the direction of Optimism i.e., Optimism and Maverick Protocol go up and down completely randomly.
Pair Corralation between Optimism and Maverick Protocol
Assuming the 90 days horizon Optimism is expected to generate 0.84 times more return on investment than Maverick Protocol. However, Optimism is 1.19 times less risky than Maverick Protocol. It trades about -0.36 of its potential returns per unit of risk. Maverick Protocol is currently generating about -0.45 per unit of risk. If you would invest 175.00 in Optimism on November 9, 2024 and sell it today you would lose (70.00) from holding Optimism or give up 40.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Optimism vs. Maverick Protocol
Performance |
| Timeline |
| Optimism |
| Maverick Protocol |
Optimism and Maverick Protocol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Optimism and Maverick Protocol
The main advantage of trading using opposite Optimism and Maverick Protocol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optimism position performs unexpectedly, Maverick Protocol 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 Maverick Protocol will offset losses from the drop in Maverick Protocol's long position.The idea behind Optimism and Maverick Protocol 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.| Maverick Protocol vs. Staked Ether | Maverick Protocol vs. Phala Network | Maverick Protocol vs. EigenLayer | Maverick Protocol vs. EOSDAC |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |