Correlation Between Chainlink and Kyber Network
Can any of the company-specific risk be diversified away by investing in both Chainlink and Kyber 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 Kyber Network into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chainlink and Kyber Network Crystal, you can compare the effects of market volatilities on Chainlink and Kyber 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 Kyber Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chainlink and Kyber Network.
Diversification Opportunities for Chainlink and Kyber Network
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chainlink and Kyber is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Chainlink and Kyber Network Crystal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyber Network Crystal 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 Kyber Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kyber Network Crystal has no effect on the direction of Chainlink i.e., Chainlink and Kyber Network go up and down completely randomly.
Pair Corralation between Chainlink and Kyber Network
Assuming the 90 days trading horizon Chainlink is expected to generate 0.69 times more return on investment than Kyber Network. However, Chainlink is 1.44 times less risky than Kyber Network. It trades about -0.22 of its potential returns per unit of risk. Kyber Network Crystal is currently generating about -0.16 per unit of risk. If you would invest 1,837 in Chainlink on January 21, 2024 and sell it today you would lose (436.00) from holding Chainlink or give up 23.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chainlink vs. Kyber Network Crystal
Performance |
| Timeline |
| Chainlink |
| Kyber Network Crystal |
Chainlink and Kyber Network Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chainlink and Kyber Network
The main advantage of trading using opposite Chainlink and Kyber Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chainlink position performs unexpectedly, Kyber 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 Kyber Network will offset losses from the drop in Kyber Network's long position.The idea behind Chainlink and Kyber Network Crystal 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.| Kyber Network vs. Solana | Kyber Network vs. XRP | Kyber Network vs. The Open Network | Kyber Network 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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