Correlation Between ULT and Origin Protocol
Can any of the company-specific risk be diversified away by investing in both ULT and Origin Protocol 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 ULT and Origin Protocol into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ULT and Origin Protocol, you can compare the effects of market volatilities on ULT and Origin Protocol 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 ULT with a short position of Origin Protocol. Check out your portfolio center. Please also check ongoing floating volatility patterns of ULT and Origin Protocol.
Diversification Opportunities for ULT and Origin Protocol
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ULT and Origin is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding ULT and Origin Protocol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Protocol and ULT 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 ULT are associated (or correlated) with Origin Protocol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Origin Protocol has no effect on the direction of ULT i.e., ULT and Origin Protocol go up and down completely randomly.
Pair Corralation between ULT and Origin Protocol
Assuming the 90 days trading horizon ULT is expected to generate 1.58 times less return on investment than Origin Protocol. But when comparing it to its historical volatility, ULT is 2.1 times less risky than Origin Protocol. It trades about 0.05 of its potential returns per unit of risk. Origin Protocol is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Origin Protocol on January 24, 2024 and sell it today you would earn a total of 2.00 from holding Origin Protocol or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 61.4% |
| Values | Daily Returns |
ULT vs. Origin Protocol
Performance |
| Timeline |
| ULT |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Origin Protocol |
ULT and Origin Protocol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ULT and Origin Protocol
The main advantage of trading using opposite ULT and Origin Protocol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ULT position performs unexpectedly, Origin Protocol 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 Origin Protocol will offset losses from the drop in Origin Protocol's long position.The idea behind ULT and Origin Protocol 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.| Origin Protocol vs. Solana | Origin Protocol vs. XRP | Origin Protocol vs. The Open Network | Origin Protocol 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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