Correlation Between FTX Token and NEO
Can any of the company-specific risk be diversified away by investing in both FTX Token and NEO 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 NEO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FTX Token and NEO, you can compare the effects of market volatilities on FTX Token and NEO 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 NEO. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTX Token and NEO.
Diversification Opportunities for FTX Token and NEO
Very good diversification
The 3 months correlation between FTX and NEO is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding FTX Token and NEO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEO 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 NEO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEO has no effect on the direction of FTX Token i.e., FTX Token and NEO go up and down completely randomly.
Pair Corralation between FTX Token and NEO
Assuming the 90 days trading horizon FTX Token is expected to under-perform the NEO. But the crypto coin apears to be less risky and, when comparing its historical volatility, FTX Token is 1.22 times less risky than NEO. The crypto coin trades about -0.23 of its potential returns per unit of risk. The NEO is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,442 in NEO on January 21, 2024 and sell it today you would earn a total of 412.00 from holding NEO or generate 28.57% 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. NEO
Performance |
| Timeline |
| FTX Token |
| NEO |
FTX Token and NEO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FTX Token and NEO
The main advantage of trading using opposite FTX Token and NEO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTX Token position performs unexpectedly, NEO 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 NEO will offset losses from the drop in NEO's long position.The idea behind FTX Token and NEO 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| CEOs Directory Screen CEOs from public companies around the world |