Correlation Between 0x and Lisk
Can any of the company-specific risk be diversified away by investing in both 0x and Lisk 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 0x and Lisk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 0x and Lisk, you can compare the effects of market volatilities on 0x and Lisk 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 0x with a short position of Lisk. Check out your portfolio center. Please also check ongoing floating volatility patterns of 0x and Lisk.
Diversification Opportunities for 0x and Lisk
Poor diversification
The 3 months correlation between 0x and Lisk is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding 0x and Lisk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lisk and 0x 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 0x are associated (or correlated) with Lisk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lisk has no effect on the direction of 0x i.e., 0x and Lisk go up and down completely randomly.
Pair Corralation between 0x and Lisk
Assuming the 90 days trading horizon 0x is expected to under-perform the Lisk. In addition to that, 0x is 1.43 times more volatile than Lisk. It trades about -0.3 of its total potential returns per unit of risk. Lisk is currently generating about -0.04 per unit of volatility. If you would invest 164.00 in Lisk on January 18, 2024 and sell it today you would lose (19.00) from holding Lisk or give up 11.59% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.65% |
Values | Daily Returns |
0x vs. Lisk
Performance |
Timeline |
0x |
Lisk |
0x and Lisk Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with 0x and Lisk
The main advantage of trading using opposite 0x and Lisk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 0x position performs unexpectedly, Lisk 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 Lisk will offset losses from the drop in Lisk's long position.The idea behind 0x and Lisk 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Stocks Directory Find actively traded stocks across global markets | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |