Correlation Between 0x and Power Ledger
Can any of the company-specific risk be diversified away by investing in both 0x and Power Ledger 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 Power Ledger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 0x and Power Ledger, you can compare the effects of market volatilities on 0x and Power Ledger 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 Power Ledger. Check out your portfolio center. Please also check ongoing floating volatility patterns of 0x and Power Ledger.
Diversification Opportunities for 0x and Power Ledger
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between 0x and Power is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding 0x and Power Ledger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Ledger 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 Power Ledger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Ledger has no effect on the direction of 0x i.e., 0x and Power Ledger go up and down completely randomly.
Pair Corralation between 0x and Power Ledger
Assuming the 90 days trading horizon 0x is expected to generate 1.98 times more return on investment than Power Ledger. However, 0x is 1.98 times more volatile than Power Ledger. It trades about 0.34 of its potential returns per unit of risk. Power Ledger is currently generating about 0.09 per unit of risk. If you would invest 38.00 in 0x on December 28, 2023 and sell it today you would earn a total of 69.00 from holding 0x or generate 181.58% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
0x vs. Power Ledger
Performance |
Timeline |
0x |
Power Ledger |
0x and Power Ledger Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with 0x and Power Ledger
The main advantage of trading using opposite 0x and Power Ledger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 0x position performs unexpectedly, Power Ledger 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 Power Ledger will offset losses from the drop in Power Ledger's long position.The idea behind 0x and Power Ledger 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.Power Ledger vs. Staked Ether | Power Ledger vs. XCAD Network | Power Ledger vs. Phala Network | Power Ledger vs. EOSDAC |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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