Correlation Between Worldcoin and Coin98
Can any of the company-specific risk be diversified away by investing in both Worldcoin and Coin98 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 Worldcoin and Coin98 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Worldcoin and Coin98, you can compare the effects of market volatilities on Worldcoin and Coin98 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 Worldcoin with a short position of Coin98. Check out your portfolio center. Please also check ongoing floating volatility patterns of Worldcoin and Coin98.
Diversification Opportunities for Worldcoin and Coin98
Poor diversification
The 3 months correlation between Worldcoin and Coin98 is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Worldcoin and Coin98 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coin98 and Worldcoin 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 Worldcoin are associated (or correlated) with Coin98. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coin98 has no effect on the direction of Worldcoin i.e., Worldcoin and Coin98 go up and down completely randomly.
Pair Corralation between Worldcoin and Coin98
Assuming the 90 days trading horizon Worldcoin is expected to under-perform the Coin98. But the crypto coin apears to be less risky and, when comparing its historical volatility, Worldcoin is 1.13 times less risky than Coin98. The crypto coin trades about -0.01 of its potential returns per unit of risk. The Coin98 is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 23.00 in Coin98 on August 30, 2024 and sell it today you would lose (5.00) from holding Coin98 or give up 21.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 68.26% |
| Values | Daily Returns |
Worldcoin vs. Coin98
Performance |
| Timeline |
| Worldcoin |
| Coin98 |
Worldcoin and Coin98 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Worldcoin and Coin98
The main advantage of trading using opposite Worldcoin and Coin98 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Worldcoin position performs unexpectedly, Coin98 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 Coin98 will offset losses from the drop in Coin98's long position.The idea behind Worldcoin and Coin98 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |