Correlation Between Polygon Ecosystem and Centrifuge
Can any of the company-specific risk be diversified away by investing in both Polygon Ecosystem and Centrifuge 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 Polygon Ecosystem and Centrifuge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polygon Ecosystem Token and Centrifuge, you can compare the effects of market volatilities on Polygon Ecosystem and Centrifuge 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 Polygon Ecosystem with a short position of Centrifuge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polygon Ecosystem and Centrifuge.
Diversification Opportunities for Polygon Ecosystem and Centrifuge
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Polygon and Centrifuge is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Polygon Ecosystem Token and Centrifuge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centrifuge and Polygon Ecosystem 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 Polygon Ecosystem Token are associated (or correlated) with Centrifuge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centrifuge has no effect on the direction of Polygon Ecosystem i.e., Polygon Ecosystem and Centrifuge go up and down completely randomly.
Pair Corralation between Polygon Ecosystem and Centrifuge
Assuming the 90 days trading horizon Polygon Ecosystem Token is expected to under-perform the Centrifuge. But the crypto coin apears to be less risky and, when comparing its historical volatility, Polygon Ecosystem Token is 2.21 times less risky than Centrifuge. The crypto coin trades about -0.06 of its potential returns per unit of risk. The Centrifuge is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 21.00 in Centrifuge on August 23, 2024 and sell it today you would earn a total of 18.00 from holding Centrifuge or generate 85.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 44.48% |
| Values | Daily Returns |
Polygon Ecosystem Token vs. Centrifuge
Performance |
| Timeline |
| Polygon Ecosystem Token |
| Centrifuge |
Polygon Ecosystem and Centrifuge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polygon Ecosystem and Centrifuge
The main advantage of trading using opposite Polygon Ecosystem and Centrifuge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polygon Ecosystem position performs unexpectedly, Centrifuge 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 Centrifuge will offset losses from the drop in Centrifuge's long position.| Polygon Ecosystem vs. Solana | Polygon Ecosystem vs. XRP | Polygon Ecosystem vs. Sui | Polygon Ecosystem vs. Staked Ether |
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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