Correlation Between Chainlink and Hedera Hashgraph
Can any of the company-specific risk be diversified away by investing in both Chainlink and Hedera Hashgraph 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 Hedera Hashgraph into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chainlink and Hedera Hashgraph, you can compare the effects of market volatilities on Chainlink and Hedera Hashgraph 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 Hedera Hashgraph. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chainlink and Hedera Hashgraph.
Diversification Opportunities for Chainlink and Hedera Hashgraph
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chainlink and Hedera is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Chainlink and Hedera Hashgraph in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hedera Hashgraph 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 Hedera Hashgraph. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hedera Hashgraph has no effect on the direction of Chainlink i.e., Chainlink and Hedera Hashgraph go up and down completely randomly.
Pair Corralation between Chainlink and Hedera Hashgraph
Assuming the 90 days trading horizon Chainlink is expected to generate 0.68 times more return on investment than Hedera Hashgraph. However, Chainlink is 1.47 times less risky than Hedera Hashgraph. It trades about -0.22 of its potential returns per unit of risk. Hedera Hashgraph is currently generating about -0.17 per unit of risk. If you would invest 2,001 in Chainlink on January 24, 2024 and sell it today you would lose (453.00) from holding Chainlink or give up 22.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chainlink vs. Hedera Hashgraph
Performance |
| Timeline |
| Chainlink |
| Hedera Hashgraph |
Chainlink and Hedera Hashgraph Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chainlink and Hedera Hashgraph
The main advantage of trading using opposite Chainlink and Hedera Hashgraph positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chainlink position performs unexpectedly, Hedera Hashgraph 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 Hedera Hashgraph will offset losses from the drop in Hedera Hashgraph's long position.The idea behind Chainlink and Hedera Hashgraph 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.| Hedera Hashgraph vs. Ethereum | Hedera Hashgraph vs. Solana | Hedera Hashgraph vs. XRP | Hedera Hashgraph vs. The Open Network |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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