Correlation Between Origin Protocol and BTM
Can any of the company-specific risk be diversified away by investing in both Origin Protocol and BTM 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 Origin Protocol and BTM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Protocol and BTM, you can compare the effects of market volatilities on Origin Protocol and BTM 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 Origin Protocol with a short position of BTM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Protocol and BTM.
Diversification Opportunities for Origin Protocol and BTM
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Origin and BTM is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Origin Protocol and BTM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTM and Origin Protocol 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 Origin Protocol are associated (or correlated) with BTM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTM has no effect on the direction of Origin Protocol i.e., Origin Protocol and BTM go up and down completely randomly.
Pair Corralation between Origin Protocol and BTM
Assuming the 90 days trading horizon Origin Protocol is expected to generate 0.86 times more return on investment than BTM. However, Origin Protocol is 1.16 times less risky than BTM. It trades about 0.08 of its potential returns per unit of risk. BTM is currently generating about -0.08 per unit of risk. If you would invest 12.00 in Origin Protocol on January 25, 2024 and sell it today you would earn a total of 5.00 from holding Origin Protocol or generate 41.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Protocol vs. BTM
Performance |
| Timeline |
| Origin Protocol |
| BTM |
Origin Protocol and BTM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Protocol and BTM
The main advantage of trading using opposite Origin Protocol and BTM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Protocol position performs unexpectedly, BTM 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 BTM will offset losses from the drop in BTM's long position.| Origin Protocol vs. Solana | Origin Protocol vs. XRP | Origin Protocol vs. Staked Ether | Origin Protocol 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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