Correlation Between XDC Network and SOLVE
Can any of the company-specific risk be diversified away by investing in both XDC Network and SOLVE 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 XDC Network and SOLVE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XDC Network and SOLVE, you can compare the effects of market volatilities on XDC Network and SOLVE 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 XDC Network with a short position of SOLVE. Check out your portfolio center. Please also check ongoing floating volatility patterns of XDC Network and SOLVE.
Diversification Opportunities for XDC Network and SOLVE
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between XDC and SOLVE is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding XDC Network and SOLVE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOLVE and XDC Network 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 XDC Network are associated (or correlated) with SOLVE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOLVE has no effect on the direction of XDC Network i.e., XDC Network and SOLVE go up and down completely randomly.
Pair Corralation between XDC Network and SOLVE
Assuming the 90 days trading horizon XDC Network is expected to generate 0.42 times more return on investment than SOLVE. However, XDC Network is 2.41 times less risky than SOLVE. It trades about 0.04 of its potential returns per unit of risk. SOLVE is currently generating about -0.16 per unit of risk. If you would invest 8.85 in XDC Network on November 9, 2024 and sell it today you would lose (0.01) from holding XDC Network or give up 0.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
XDC Network vs. SOLVE
Performance |
| Timeline |
| XDC Network |
| SOLVE |
XDC Network and SOLVE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XDC Network and SOLVE
The main advantage of trading using opposite XDC Network and SOLVE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XDC Network position performs unexpectedly, SOLVE 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 SOLVE will offset losses from the drop in SOLVE's long position.| XDC Network vs. ORN | XDC Network vs. The Graph | XDC Network vs. Staked Ether | XDC Network vs. Phala Network |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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