Correlation Between FTX Token and Maker
Can any of the company-specific risk be diversified away by investing in both FTX Token and Maker 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 Maker into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FTX Token and Maker, you can compare the effects of market volatilities on FTX Token and Maker 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 Maker. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTX Token and Maker.
Diversification Opportunities for FTX Token and Maker
Very good diversification
The 3 months correlation between FTX and Maker is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding FTX Token and Maker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maker 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 Maker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maker has no effect on the direction of FTX Token i.e., FTX Token and Maker go up and down completely randomly.
Pair Corralation between FTX Token and Maker
Assuming the 90 days trading horizon FTX Token is expected to generate 1.76 times less return on investment than Maker. In addition to that, FTX Token is 1.33 times more volatile than Maker. It trades about 0.15 of its total potential returns per unit of risk. Maker is currently generating about 0.36 per unit of volatility. If you would invest 217,632 in Maker on December 29, 2023 and sell it today you would earn a total of 115,609 from holding Maker or generate 53.12% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
FTX Token vs. Maker
Performance |
Timeline |
FTX Token |
Maker |
FTX Token and Maker Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with FTX Token and Maker
The main advantage of trading using opposite FTX Token and Maker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTX Token position performs unexpectedly, Maker 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 Maker will offset losses from the drop in Maker's long position.The idea behind FTX Token and Maker 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 CEOs Directory module to screen CEOs from public companies around the world.
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