Correlation Between Polygon and Ontology
Can any of the company-specific risk be diversified away by investing in both Polygon and Ontology 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 Polygon and Ontology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polygon and Ontology, you can compare the effects of market volatilities on Polygon and Ontology 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 Polygon with a short position of Ontology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polygon and Ontology.
Diversification Opportunities for Polygon and Ontology
Very weak diversification
The 3 months correlation between Polygon and Ontology is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Polygon and Ontology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ontology and Polygon 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 Polygon are associated (or correlated) with Ontology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ontology has no effect on the direction of Polygon i.e., Polygon and Ontology go up and down completely randomly.
Pair Corralation between Polygon and Ontology
Assuming the 90 days trading horizon Polygon is expected to generate 1.01 times less return on investment than Ontology. In addition to that, Polygon is 1.08 times more volatile than Ontology. It trades about 0.03 of its total potential returns per unit of risk. Ontology is currently generating about 0.03 per unit of volatility. If you would invest 29.00 in Ontology on January 20, 2024 and sell it today you would earn a total of 4.00 from holding Ontology or generate 13.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polygon vs. Ontology
Performance |
| Timeline |
| Polygon |
| Ontology |
Polygon and Ontology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polygon and Ontology
The main advantage of trading using opposite Polygon and Ontology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polygon position performs unexpectedly, Ontology 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 Ontology will offset losses from the drop in Ontology's long position.The idea behind Polygon and Ontology 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.| Ontology vs. Ontology Gas | Ontology vs. Staked Ether | Ontology vs. XCAD Network | Ontology vs. Phala 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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