Correlation Between Phala Network and DATA
Can any of the company-specific risk be diversified away by investing in both Phala Network and DATA 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 DATA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phala Network and DATA, you can compare the effects of market volatilities on Phala Network and DATA 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 DATA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phala Network and DATA.
Diversification Opportunities for Phala Network and DATA
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Phala and DATA is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Phala Network and DATA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DATA 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 DATA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DATA has no effect on the direction of Phala Network i.e., Phala Network and DATA go up and down completely randomly.
Pair Corralation between Phala Network and DATA
Assuming the 90 days trading horizon Phala Network is expected to generate 1.94 times more return on investment than DATA. However, Phala Network is 1.94 times more volatile than DATA. It trades about 0.04 of its potential returns per unit of risk. DATA is currently generating about -0.05 per unit of risk. If you would invest 19.00 in Phala Network on November 7, 2024 and sell it today you would lose (3.00) from holding Phala Network or give up 15.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Phala Network vs. DATA
Performance |
| Timeline |
| Phala Network |
| DATA |
Phala Network and DATA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phala Network and DATA
The main advantage of trading using opposite Phala Network and DATA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phala Network position performs unexpectedly, DATA 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 DATA will offset losses from the drop in DATA'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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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