Correlation Between Pyth Network and 1inch
Can any of the company-specific risk be diversified away by investing in both Pyth Network and 1inch 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 Pyth Network and 1inch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pyth Network and 1inch, you can compare the effects of market volatilities on Pyth Network and 1inch 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 Pyth Network with a short position of 1inch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pyth Network and 1inch.
Diversification Opportunities for Pyth Network and 1inch
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pyth and 1inch is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Pyth Network and 1inch in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1inch and Pyth 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 Pyth Network are associated (or correlated) with 1inch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1inch has no effect on the direction of Pyth Network i.e., Pyth Network and 1inch go up and down completely randomly.
Pair Corralation between Pyth Network and 1inch
Assuming the 90 days trading horizon Pyth Network is expected to generate 2.1 times less return on investment than 1inch. But when comparing it to its historical volatility, Pyth Network is 1.09 times less risky than 1inch. It trades about 0.21 of its potential returns per unit of risk. 1inch is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 26.00 in 1inch on August 30, 2024 and sell it today you would earn a total of 15.00 from holding 1inch or generate 57.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pyth Network vs. 1inch
Performance |
| Timeline |
| Pyth Network |
| 1inch |
Pyth Network and 1inch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pyth Network and 1inch
The main advantage of trading using opposite Pyth Network and 1inch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pyth Network position performs unexpectedly, 1inch 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 1inch will offset losses from the drop in 1inch's long position.The idea behind Pyth Network and 1inch pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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