Correlation Between Uniswap Protocol and DENT
Can any of the company-specific risk be diversified away by investing in both Uniswap Protocol and DENT 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 Uniswap Protocol and DENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uniswap Protocol Token and DENT, you can compare the effects of market volatilities on Uniswap Protocol and DENT 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 Uniswap Protocol with a short position of DENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uniswap Protocol and DENT.
Diversification Opportunities for Uniswap Protocol and DENT
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Uniswap and DENT is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Uniswap Protocol Token and DENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DENT and Uniswap Protocol 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 Uniswap Protocol Token are associated (or correlated) with DENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DENT has no effect on the direction of Uniswap Protocol i.e., Uniswap Protocol and DENT go up and down completely randomly.
Pair Corralation between Uniswap Protocol and DENT
Assuming the 90 days trading horizon Uniswap Protocol is expected to generate 1.23 times less return on investment than DENT. In addition to that, Uniswap Protocol is 1.62 times more volatile than DENT. It trades about 0.2 of its total potential returns per unit of risk. DENT is currently generating about 0.4 per unit of volatility. If you would invest 0.08 in DENT on August 25, 2024 and sell it today you would earn a total of 0.04 from holding DENT or generate 46.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Uniswap Protocol Token vs. DENT
Performance |
| Timeline |
| Uniswap Protocol Token |
| DENT |
Uniswap Protocol and DENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uniswap Protocol and DENT
The main advantage of trading using opposite Uniswap Protocol and DENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uniswap Protocol position performs unexpectedly, DENT 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 DENT will offset losses from the drop in DENT's long position.| Uniswap Protocol vs. Staked Ether | Uniswap Protocol vs. EigenLayer | Uniswap Protocol vs. EOSDAC | Uniswap Protocol vs. BLZ |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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