Correlation Between Tether and True USD
Can any of the company-specific risk be diversified away by investing in both Tether and True USD 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 Tether and True USD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tether and True USD, you can compare the effects of market volatilities on Tether and True USD 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 Tether with a short position of True USD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tether and True USD.
Diversification Opportunities for Tether and True USD
Pay attention - limited upside
The 3 months correlation between Tether and True is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Tether and True USD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on True USD and Tether 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 Tether are associated (or correlated) with True USD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of True USD has no effect on the direction of Tether i.e., Tether and True USD go up and down completely randomly.
Pair Corralation between Tether and True USD
If you would invest 100.00 in True USD on January 26, 2024 and sell it today you would earn a total of 0.00 from holding True USD or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tether vs. True USD
Performance |
| Timeline |
| Tether |
| True USD |
Tether and True USD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tether and True USD
The main advantage of trading using opposite Tether and True USD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tether position performs unexpectedly, True USD 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 True USD will offset losses from the drop in True USD's long position.The idea behind Tether and True USD 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.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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| AI Investment Finder Use AI to screen and filter profitable investment opportunities | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |