Correlation Between Phala Network and XDC Network
Can any of the company-specific risk be diversified away by investing in both Phala Network and XDC Network 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 XDC Network into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phala Network and XDC Network, you can compare the effects of market volatilities on Phala Network and XDC Network 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 XDC Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phala Network and XDC Network.
Diversification Opportunities for Phala Network and XDC Network
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Phala and XDC is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Phala Network and XDC Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XDC Network 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 XDC Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XDC Network has no effect on the direction of Phala Network i.e., Phala Network and XDC Network go up and down completely randomly.
Pair Corralation between Phala Network and XDC Network
Assuming the 90 days trading horizon Phala Network is expected to generate 1.42 times less return on investment than XDC Network. In addition to that, Phala Network is 1.71 times more volatile than XDC Network. It trades about 0.05 of its total potential returns per unit of risk. XDC Network is currently generating about 0.12 per unit of volatility. If you would invest 3.53 in XDC Network on November 3, 2024 and sell it today you would earn a total of 7.47 from holding XDC Network or generate 211.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.46% |
| Values | Daily Returns |
Phala Network vs. XDC Network
Performance |
| Timeline |
| Phala Network |
| XDC Network |
Phala Network and XDC Network Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phala Network and XDC Network
The main advantage of trading using opposite Phala Network and XDC Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phala Network position performs unexpectedly, XDC Network 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 XDC Network will offset losses from the drop in XDC Network's long position.| Phala Network vs. Staked Ether | Phala Network vs. EigenLayer | Phala Network vs. EOSDAC | Phala Network vs. BLZ |
| XDC Network vs. Staked Ether | XDC Network vs. Phala Network | XDC Network vs. EigenLayer | XDC Network 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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