Correlation Between NEM and Dash
Can any of the company-specific risk be diversified away by investing in both NEM and Dash 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 NEM and Dash into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEM and Dash, you can compare the effects of market volatilities on NEM and Dash 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 NEM with a short position of Dash. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEM and Dash.
Diversification Opportunities for NEM and Dash
Almost no diversification
The 3 months correlation between NEM and Dash is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding NEM and Dash in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dash and NEM 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 NEM are associated (or correlated) with Dash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dash has no effect on the direction of NEM i.e., NEM and Dash go up and down completely randomly.
Pair Corralation between NEM and Dash
Assuming the 90 days trading horizon NEM is expected to generate 1.23 times more return on investment than Dash. However, NEM is 1.23 times more volatile than Dash. It trades about 0.0 of its potential returns per unit of risk. Dash is currently generating about -0.02 per unit of risk. If you would invest 8.81 in NEM on January 19, 2024 and sell it today you would lose (5.26) from holding NEM or give up 59.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEM vs. Dash
Performance |
| Timeline |
| NEM |
| Dash |
NEM and Dash Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEM and Dash
The main advantage of trading using opposite NEM and Dash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEM position performs unexpectedly, Dash 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 Dash will offset losses from the drop in Dash's long position.The idea behind NEM and Dash 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| AI Investment Finder Use AI to screen and filter profitable investment opportunities | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |