Correlation Between 0x and Waves
Can any of the company-specific risk be diversified away by investing in both 0x and Waves 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 Waves into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 0x and Waves, you can compare the effects of market volatilities on 0x and Waves 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 Waves. Check out your portfolio center. Please also check ongoing floating volatility patterns of 0x and Waves.
Diversification Opportunities for 0x and Waves
Almost no diversification
The 3 months correlation between 0x and Waves is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding 0x and Waves in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waves 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 Waves. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waves has no effect on the direction of 0x i.e., 0x and Waves go up and down completely randomly.
Pair Corralation between 0x and Waves
Assuming the 90 days trading horizon 0x is expected to generate 1.81 times more return on investment than Waves. However, 0x is 1.81 times more volatile than Waves. It trades about 0.09 of its potential returns per unit of risk. Waves is currently generating about 0.06 per unit of risk. If you would invest 21.00 in 0x on January 23, 2024 and sell it today you would earn a total of 34.00 from holding 0x or generate 161.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
0x vs. Waves
Performance |
| Timeline |
| 0x |
| Waves |
0x and Waves Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 0x and Waves
The main advantage of trading using opposite 0x and Waves positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 0x position performs unexpectedly, Waves 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 Waves will offset losses from the drop in Waves' long position.The idea behind 0x and Waves 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |