Correlation Between Worldcoin and POCC
Can any of the company-specific risk be diversified away by investing in both Worldcoin and POCC 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 POCC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Worldcoin and POCC, you can compare the effects of market volatilities on Worldcoin and POCC 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 POCC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Worldcoin and POCC.
Diversification Opportunities for Worldcoin and POCC
Poor diversification
The 3 months correlation between Worldcoin and POCC is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Worldcoin and POCC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POCC 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 POCC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of POCC has no effect on the direction of Worldcoin i.e., Worldcoin and POCC go up and down completely randomly.
Pair Corralation between Worldcoin and POCC
Assuming the 90 days trading horizon Worldcoin is expected to under-perform the POCC. But the crypto coin apears to be less risky and, when comparing its historical volatility, Worldcoin is 14.73 times less risky than POCC. The crypto coin trades about -0.02 of its potential returns per unit of risk. The POCC is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 0.04 in POCC on August 23, 2024 and sell it today you would lose (0.03) from holding POCC or give up 60.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 68.42% |
| Values | Daily Returns |
Worldcoin vs. POCC
Performance |
| Timeline |
| Worldcoin |
| POCC |
Worldcoin and POCC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Worldcoin and POCC
The main advantage of trading using opposite Worldcoin and POCC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Worldcoin position performs unexpectedly, POCC 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 POCC will offset losses from the drop in POCC's long position.The idea behind Worldcoin and POCC 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |