Correlation Between Polygon Ecosystem and CMT
Can any of the company-specific risk be diversified away by investing in both Polygon Ecosystem and CMT 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 CMT 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 CMT, you can compare the effects of market volatilities on Polygon Ecosystem and CMT 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 CMT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polygon Ecosystem and CMT.
Diversification Opportunities for Polygon Ecosystem and CMT
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Polygon and CMT is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Polygon Ecosystem Token and CMT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CMT 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 CMT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CMT has no effect on the direction of Polygon Ecosystem i.e., Polygon Ecosystem and CMT go up and down completely randomly.
Pair Corralation between Polygon Ecosystem and CMT
Assuming the 90 days trading horizon Polygon Ecosystem Token is expected to generate 1.54 times more return on investment than CMT. However, Polygon Ecosystem is 1.54 times more volatile than CMT. It trades about 0.59 of its potential returns per unit of risk. CMT is currently generating about 0.35 per unit of risk. If you would invest 30.00 in Polygon Ecosystem Token on September 4, 2024 and sell it today you would earn a total of 37.00 from holding Polygon Ecosystem Token or generate 123.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polygon Ecosystem Token vs. CMT
Performance |
| Timeline |
| Polygon Ecosystem Token |
| CMT |
Polygon Ecosystem and CMT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polygon Ecosystem and CMT
The main advantage of trading using opposite Polygon Ecosystem and CMT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polygon Ecosystem position performs unexpectedly, CMT 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 CMT will offset losses from the drop in CMT's long position.| Polygon Ecosystem vs. XRP | Polygon Ecosystem vs. Solana | Polygon Ecosystem vs. Staked Ether | Polygon Ecosystem vs. Toncoin |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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