Correlation Between Origin Protocol and REP
Can any of the company-specific risk be diversified away by investing in both Origin Protocol and REP 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 REP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Protocol and REP, you can compare the effects of market volatilities on Origin Protocol and REP 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 REP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Protocol and REP.
Diversification Opportunities for Origin Protocol and REP
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Origin and REP is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Origin Protocol and REP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REP 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 REP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REP has no effect on the direction of Origin Protocol i.e., Origin Protocol and REP go up and down completely randomly.
Pair Corralation between Origin Protocol and REP
Assuming the 90 days trading horizon Origin Protocol is expected to generate 1.17 times more return on investment than REP. However, Origin Protocol is 1.17 times more volatile than REP. It trades about -0.12 of its potential returns per unit of risk. REP is currently generating about -0.2 per unit of risk. If you would invest 21.00 in Origin Protocol on January 26, 2024 and sell it today you would lose (5.00) from holding Origin Protocol or give up 23.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Protocol vs. REP
Performance |
| Timeline |
| Origin Protocol |
| REP |
Origin Protocol and REP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Protocol and REP
The main advantage of trading using opposite Origin Protocol and REP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Protocol position performs unexpectedly, REP 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 REP will offset losses from the drop in REP'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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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