Correlation Between Uniswap Protocol and HOT
Can any of the company-specific risk be diversified away by investing in both Uniswap Protocol and HOT 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 HOT 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 HOT, you can compare the effects of market volatilities on Uniswap Protocol and HOT 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 HOT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uniswap Protocol and HOT.
Diversification Opportunities for Uniswap Protocol and HOT
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Uniswap and HOT is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Uniswap Protocol Token and HOT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HOT 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 HOT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HOT has no effect on the direction of Uniswap Protocol i.e., Uniswap Protocol and HOT go up and down completely randomly.
Pair Corralation between Uniswap Protocol and HOT
Assuming the 90 days trading horizon Uniswap Protocol Token is expected to generate 1.11 times more return on investment than HOT. However, Uniswap Protocol is 1.11 times more volatile than HOT. It trades about 0.22 of its potential returns per unit of risk. HOT is currently generating about 0.19 per unit of risk. If you would invest 595.00 in Uniswap Protocol Token on August 30, 2024 and sell it today you would earn a total of 670.00 from holding Uniswap Protocol Token or generate 112.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Uniswap Protocol Token vs. HOT
Performance |
| Timeline |
| Uniswap Protocol Token |
| HOT |
Uniswap Protocol and HOT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uniswap Protocol and HOT
The main advantage of trading using opposite Uniswap Protocol and HOT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uniswap Protocol position performs unexpectedly, HOT 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 HOT will offset losses from the drop in HOT'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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