Correlation Between Origin Protocol and Cronos
Can any of the company-specific risk be diversified away by investing in both Origin Protocol and Cronos 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 Cronos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Protocol and Cronos, you can compare the effects of market volatilities on Origin Protocol and Cronos 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 Cronos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Protocol and Cronos.
Diversification Opportunities for Origin Protocol and Cronos
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Origin and Cronos is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Origin Protocol and Cronos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cronos 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 Cronos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cronos has no effect on the direction of Origin Protocol i.e., Origin Protocol and Cronos go up and down completely randomly.
Pair Corralation between Origin Protocol and Cronos
Assuming the 90 days trading horizon Origin Protocol is expected to generate 2.92 times less return on investment than Cronos. But when comparing it to its historical volatility, Origin Protocol is 1.06 times less risky than Cronos. It trades about 0.09 of its potential returns per unit of risk. Cronos is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 11.00 in Cronos on December 30, 2023 and sell it today you would earn a total of 5.00 from holding Cronos or generate 45.45% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Origin Protocol vs. Cronos
Performance |
Timeline |
Origin Protocol |
Cronos |
Origin Protocol and Cronos Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Origin Protocol and Cronos
The main advantage of trading using opposite Origin Protocol and Cronos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Protocol position performs unexpectedly, Cronos 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 Cronos will offset losses from the drop in Cronos' 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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