Correlation Between FTX Token and Chiliz
Can any of the company-specific risk be diversified away by investing in both FTX Token and Chiliz 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 FTX Token and Chiliz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FTX Token and Chiliz, you can compare the effects of market volatilities on FTX Token and Chiliz 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 FTX Token with a short position of Chiliz. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTX Token and Chiliz.
Diversification Opportunities for FTX Token and Chiliz
Average diversification
The 3 months correlation between FTX and Chiliz is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding FTX Token and Chiliz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chiliz and FTX Token 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 FTX Token are associated (or correlated) with Chiliz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chiliz has no effect on the direction of FTX Token i.e., FTX Token and Chiliz go up and down completely randomly.
Pair Corralation between FTX Token and Chiliz
Assuming the 90 days trading horizon FTX Token is expected to under-perform the Chiliz. In addition to that, FTX Token is 1.0 times more volatile than Chiliz. It trades about -0.12 of its total potential returns per unit of risk. Chiliz is currently generating about 0.06 per unit of volatility. If you would invest 10.00 in Chiliz on January 21, 2024 and sell it today you would earn a total of 1.00 from holding Chiliz or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FTX Token vs. Chiliz
Performance |
| Timeline |
| FTX Token |
| Chiliz |
FTX Token and Chiliz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FTX Token and Chiliz
The main advantage of trading using opposite FTX Token and Chiliz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTX Token position performs unexpectedly, Chiliz 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 Chiliz will offset losses from the drop in Chiliz's long position.The idea behind FTX Token and Chiliz 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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