Correlation Between Uniswap Protocol and GAIA
Can any of the company-specific risk be diversified away by investing in both Uniswap Protocol and GAIA 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 GAIA 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 GAIA, you can compare the effects of market volatilities on Uniswap Protocol and GAIA 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 GAIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uniswap Protocol and GAIA.
Diversification Opportunities for Uniswap Protocol and GAIA
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Uniswap and GAIA is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Uniswap Protocol Token and GAIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAIA 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 GAIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAIA has no effect on the direction of Uniswap Protocol i.e., Uniswap Protocol and GAIA go up and down completely randomly.
Pair Corralation between Uniswap Protocol and GAIA
Assuming the 90 days trading horizon Uniswap Protocol Token is expected to under-perform the GAIA. But the crypto coin apears to be less risky and, when comparing its historical volatility, Uniswap Protocol Token is 1.45 times less risky than GAIA. The crypto coin trades about -0.25 of its potential returns per unit of risk. The GAIA is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 0.37 in GAIA on November 8, 2024 and sell it today you would lose (0.07) from holding GAIA or give up 19.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Uniswap Protocol Token vs. GAIA
Performance |
| Timeline |
| Uniswap Protocol Token |
| GAIA |
Uniswap Protocol and GAIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uniswap Protocol and GAIA
The main advantage of trading using opposite Uniswap Protocol and GAIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uniswap Protocol position performs unexpectedly, GAIA 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 GAIA will offset losses from the drop in GAIA's long position.| Uniswap Protocol vs. Staked Ether | Uniswap Protocol vs. Phala Network | Uniswap Protocol vs. EigenLayer | Uniswap Protocol vs. EOSDAC |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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