Correlation Between Phala Network and Curve DAO
Can any of the company-specific risk be diversified away by investing in both Phala Network and Curve DAO 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 Phala Network and Curve DAO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phala Network and Curve DAO Token, you can compare the effects of market volatilities on Phala Network and Curve DAO 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 Phala Network with a short position of Curve DAO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phala Network and Curve DAO.
Diversification Opportunities for Phala Network and Curve DAO
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Phala and Curve is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Phala Network and Curve DAO Token in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Curve DAO Token and Phala Network 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 Phala Network are associated (or correlated) with Curve DAO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Curve DAO Token has no effect on the direction of Phala Network i.e., Phala Network and Curve DAO go up and down completely randomly.
Pair Corralation between Phala Network and Curve DAO
Assuming the 90 days trading horizon Phala Network is expected to under-perform the Curve DAO. In addition to that, Phala Network is 1.24 times more volatile than Curve DAO Token. It trades about -0.25 of its total potential returns per unit of risk. Curve DAO Token is currently generating about -0.25 per unit of volatility. If you would invest 86.00 in Curve DAO Token on November 8, 2024 and sell it today you would lose (39.00) from holding Curve DAO Token or give up 45.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Phala Network vs. Curve DAO Token
Performance |
| Timeline |
| Phala Network |
| Curve DAO Token |
Phala Network and Curve DAO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phala Network and Curve DAO
The main advantage of trading using opposite Phala Network and Curve DAO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phala Network position performs unexpectedly, Curve DAO 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 Curve DAO will offset losses from the drop in Curve DAO's long position.| 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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