Correlation Between Phala Network and XY Oracle
Can any of the company-specific risk be diversified away by investing in both Phala Network and XY Oracle 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 XY Oracle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phala Network and XY Oracle, you can compare the effects of market volatilities on Phala Network and XY Oracle 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 XY Oracle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phala Network and XY Oracle.
Diversification Opportunities for Phala Network and XY Oracle
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Phala and XYO is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Phala Network and XY Oracle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XY Oracle 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 XY Oracle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XY Oracle has no effect on the direction of Phala Network i.e., Phala Network and XY Oracle go up and down completely randomly.
Pair Corralation between Phala Network and XY Oracle
Assuming the 90 days trading horizon Phala Network is expected to generate 2.13 times less return on investment than XY Oracle. But when comparing it to its historical volatility, Phala Network is 1.78 times less risky than XY Oracle. It trades about 0.05 of its potential returns per unit of risk. XY Oracle is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 0.52 in XY Oracle on December 16, 2024 and sell it today you would earn a total of 0.61 from holding XY Oracle or generate 117.06% 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. XY Oracle
Performance |
| Timeline |
| Phala Network |
| XY Oracle |
Phala Network and XY Oracle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phala Network and XY Oracle
The main advantage of trading using opposite Phala Network and XY Oracle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phala Network position performs unexpectedly, XY Oracle 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 XY Oracle will offset losses from the drop in XY Oracle's long position.| Phala Network vs. Staked Ether | ||
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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