Correlation Between KuCoin Token and Decentraland
Can any of the company-specific risk be diversified away by investing in both KuCoin Token and Decentraland 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 KuCoin Token and Decentraland into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KuCoin Token and Decentraland, you can compare the effects of market volatilities on KuCoin Token and Decentraland 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 KuCoin Token with a short position of Decentraland. Check out your portfolio center. Please also check ongoing floating volatility patterns of KuCoin Token and Decentraland.
Diversification Opportunities for KuCoin Token and Decentraland
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between KuCoin and Decentraland is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding KuCoin Token and Decentraland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Decentraland and KuCoin 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 KuCoin Token are associated (or correlated) with Decentraland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Decentraland has no effect on the direction of KuCoin Token i.e., KuCoin Token and Decentraland go up and down completely randomly.
Pair Corralation between KuCoin Token and Decentraland
Assuming the 90 days trading horizon KuCoin Token is expected to under-perform the Decentraland. But the crypto coin apears to be less risky and, when comparing its historical volatility, KuCoin Token is 1.21 times less risky than Decentraland. The crypto coin trades about -0.43 of its potential returns per unit of risk. The Decentraland is currently generating about -0.22 of returns per unit of risk over similar time horizon. If you would invest 63.00 in Decentraland on January 20, 2024 and sell it today you would lose (19.00) from holding Decentraland or give up 30.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
KuCoin Token vs. Decentraland
Performance |
| Timeline |
| KuCoin Token |
| Decentraland |
KuCoin Token and Decentraland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KuCoin Token and Decentraland
The main advantage of trading using opposite KuCoin Token and Decentraland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KuCoin Token position performs unexpectedly, Decentraland 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 Decentraland will offset losses from the drop in Decentraland's long position.| KuCoin Token vs. Solana | KuCoin Token vs. XRP | KuCoin Token vs. The Open Network | KuCoin Token vs. Staked Ether |
| Decentraland vs. Solana | Decentraland vs. XRP | Decentraland vs. The Open Network | Decentraland vs. Staked Ether |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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