Correlation Between Phala Network and Lumia
Can any of the company-specific risk be diversified away by investing in both Phala Network and Lumia 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 Lumia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phala Network and Lumia, you can compare the effects of market volatilities on Phala Network and Lumia 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 Lumia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phala Network and Lumia.
Diversification Opportunities for Phala Network and Lumia
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Phala and Lumia is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Phala Network and Lumia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lumia 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 Lumia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lumia has no effect on the direction of Phala Network i.e., Phala Network and Lumia go up and down completely randomly.
Pair Corralation between Phala Network and Lumia
Assuming the 90 days trading horizon Phala Network is expected to generate 4.72 times more return on investment than Lumia. However, Phala Network is 4.72 times more volatile than Lumia. It trades about 0.13 of its potential returns per unit of risk. Lumia is currently generating about -0.31 per unit of risk. If you would invest 20.00 in Phala Network on October 24, 2024 and sell it today you would earn a total of 5.00 from holding Phala Network or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Phala Network vs. Lumia
Performance |
| Timeline |
| Phala Network |
| Lumia |
Phala Network and Lumia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phala Network and Lumia
The main advantage of trading using opposite Phala Network and Lumia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phala Network position performs unexpectedly, Lumia 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 Lumia will offset losses from the drop in Lumia'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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |