Correlation Between Phala Network and GAIA
Can any of the company-specific risk be diversified away by investing in both Phala Network and GAIA 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 GAIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phala Network and GAIA, you can compare the effects of market volatilities on Phala Network and GAIA 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 GAIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phala Network and GAIA.
Diversification Opportunities for Phala Network and GAIA
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Phala and GAIA is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Phala Network and GAIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAIA 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 GAIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAIA has no effect on the direction of Phala Network i.e., Phala Network and GAIA go up and down completely randomly.
Pair Corralation between Phala Network and GAIA
Assuming the 90 days trading horizon Phala Network is expected to generate 1.44 times less return on investment than GAIA. But when comparing it to its historical volatility, Phala Network is 1.49 times less risky than GAIA. It trades about 0.05 of its potential returns per unit of risk. GAIA is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 0.18 in GAIA on November 8, 2024 and sell it today you would earn a total of 0.11 from holding GAIA or generate 63.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Phala Network vs. GAIA
Performance |
| Timeline |
| Phala Network |
| GAIA |
Phala Network and GAIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phala Network and GAIA
The main advantage of trading using opposite Phala Network and GAIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phala Network position performs unexpectedly, GAIA 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 GAIA will offset losses from the drop in GAIA'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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |