Correlation Between Chainlink and Celsius Network
Can any of the company-specific risk be diversified away by investing in both Chainlink and Celsius Network 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 Chainlink and Celsius Network into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chainlink and Celsius Network, you can compare the effects of market volatilities on Chainlink and Celsius Network 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 Chainlink with a short position of Celsius Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chainlink and Celsius Network.
Diversification Opportunities for Chainlink and Celsius Network
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chainlink and Celsius is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Chainlink and Celsius Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celsius Network and Chainlink 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 Chainlink are associated (or correlated) with Celsius Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celsius Network has no effect on the direction of Chainlink i.e., Chainlink and Celsius Network go up and down completely randomly.
Pair Corralation between Chainlink and Celsius Network
Assuming the 90 days trading horizon Chainlink is expected to generate 2.82 times less return on investment than Celsius Network. But when comparing it to its historical volatility, Chainlink is 2.86 times less risky than Celsius Network. It trades about 0.03 of its potential returns per unit of risk. Celsius Network is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 298.00 in Celsius Network on December 29, 2023 and sell it today you would lose (269.00) from holding Celsius Network or give up 90.27% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Chainlink vs. Celsius Network
Performance |
Timeline |
Chainlink |
Celsius Network |
Chainlink and Celsius Network Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chainlink and Celsius Network
The main advantage of trading using opposite Chainlink and Celsius Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chainlink position performs unexpectedly, Celsius Network 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 Celsius Network will offset losses from the drop in Celsius Network's long position.The idea behind Chainlink and Celsius Network 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.Celsius Network vs. Staked Ether | Celsius Network vs. XCAD Network | Celsius Network vs. Phala Network | Celsius Network vs. EOSDAC |
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.
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