Correlation Between Solana and ANKR
Can any of the company-specific risk be diversified away by investing in both Solana and ANKR 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 Solana and ANKR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solana and ANKR, you can compare the effects of market volatilities on Solana and ANKR 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 Solana with a short position of ANKR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solana and ANKR.
Diversification Opportunities for Solana and ANKR
Poor diversification
The 3 months correlation between Solana and ANKR is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Solana and ANKR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANKR and Solana 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 Solana are associated (or correlated) with ANKR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANKR has no effect on the direction of Solana i.e., Solana and ANKR go up and down completely randomly.
Pair Corralation between Solana and ANKR
Assuming the 90 days trading horizon Solana is expected to generate 0.77 times more return on investment than ANKR. However, Solana is 1.29 times less risky than ANKR. It trades about 0.24 of its potential returns per unit of risk. ANKR is currently generating about 0.13 per unit of risk. If you would invest 15,678 in Solana on August 28, 2024 and sell it today you would earn a total of 7,732 from holding Solana or generate 49.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solana vs. ANKR
Performance |
| Timeline |
| Solana |
| ANKR |
Solana and ANKR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solana and ANKR
The main advantage of trading using opposite Solana and ANKR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solana position performs unexpectedly, ANKR 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 ANKR will offset losses from the drop in ANKR's long position.The idea behind Solana and ANKR 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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