Correlation Between Polygon Ecosystem and Solana
Can any of the company-specific risk be diversified away by investing in both Polygon Ecosystem and Solana 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 Solana 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 Solana, you can compare the effects of market volatilities on Polygon Ecosystem and Solana 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 Solana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polygon Ecosystem and Solana.
Diversification Opportunities for Polygon Ecosystem and Solana
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Polygon and Solana is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Polygon Ecosystem Token and Solana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solana 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 Solana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solana has no effect on the direction of Polygon Ecosystem i.e., Polygon Ecosystem and Solana go up and down completely randomly.
Pair Corralation between Polygon Ecosystem and Solana
Assuming the 90 days trading horizon Polygon Ecosystem is expected to generate 1.67 times less return on investment than Solana. In addition to that, Polygon Ecosystem is 1.28 times more volatile than Solana. It trades about 0.19 of its total potential returns per unit of risk. Solana is currently generating about 0.41 per unit of volatility. If you would invest 17,067 in Solana on August 23, 2024 and sell it today you would earn a total of 8,640 from holding Solana or generate 50.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polygon Ecosystem Token vs. Solana
Performance |
| Timeline |
| Polygon Ecosystem Token |
| Solana |
Polygon Ecosystem and Solana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polygon Ecosystem and Solana
The main advantage of trading using opposite Polygon Ecosystem and Solana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polygon Ecosystem position performs unexpectedly, Solana 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 Solana will offset losses from the drop in Solana'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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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