Correlation Between Origin Protocol and Theta Network
Can any of the company-specific risk be diversified away by investing in both Origin Protocol and Theta 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 Origin Protocol and Theta Network into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Protocol and Theta Network, you can compare the effects of market volatilities on Origin Protocol and Theta 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 Origin Protocol with a short position of Theta Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Protocol and Theta Network.
Diversification Opportunities for Origin Protocol and Theta Network
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Origin and Theta is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Origin Protocol and Theta Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Theta Network 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 Theta Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Theta Network has no effect on the direction of Origin Protocol i.e., Origin Protocol and Theta Network go up and down completely randomly.
Pair Corralation between Origin Protocol and Theta Network
Assuming the 90 days trading horizon Origin Protocol is expected to generate 1.56 times less return on investment than Theta Network. In addition to that, Origin Protocol is 1.12 times more volatile than Theta Network. It trades about 0.04 of its total potential returns per unit of risk. Theta Network is currently generating about 0.07 per unit of volatility. If you would invest 99.00 in Theta Network on January 17, 2024 and sell it today you would earn a total of 101.00 from holding Theta Network or generate 102.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Protocol vs. Theta Network
Performance |
| Timeline |
| Origin Protocol |
| Theta Network |
Origin Protocol and Theta Network Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Protocol and Theta Network
The main advantage of trading using opposite Origin Protocol and Theta Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Protocol position performs unexpectedly, Theta 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 Theta Network will offset losses from the drop in Theta Network's long position.| Origin Protocol vs. Solana | Origin Protocol vs. XRP | Origin Protocol vs. The Open Network | Origin Protocol vs. Staked Ether |
| Theta Network vs. Solana | Theta Network vs. XRP | Theta Network vs. The Open Network | Theta 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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