Correlation Between Open Network and Numeraire
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By analyzing existing cross correlation between The Open Network and Numeraire, you can compare the effects of market volatilities on Open Network and Numeraire 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 Open Network with a short position of Numeraire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Open Network and Numeraire.
Diversification Opportunities for Open Network and Numeraire
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Open and Numeraire is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding The Open Network and Numeraire in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Numeraire and Open Network 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 The Open Network are associated (or correlated) with Numeraire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Numeraire has no effect on the direction of Open Network i.e., Open Network and Numeraire go up and down completely randomly.
Pair Corralation between Open Network and Numeraire
Assuming the 90 days trading horizon The Open Network is expected to generate 0.67 times more return on investment than Numeraire. However, The Open Network is 1.49 times less risky than Numeraire. It trades about 0.08 of its potential returns per unit of risk. Numeraire is currently generating about 0.05 per unit of risk. If you would invest 215.00 in The Open Network on January 31, 2024 and sell it today you would earn a total of 308.00 from holding The Open Network or generate 143.26% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
The Open Network vs. Numeraire
Performance |
Timeline |
Open Network |
Numeraire |
Open Network and Numeraire Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Open Network and Numeraire
The main advantage of trading using opposite Open Network and Numeraire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Open Network position performs unexpectedly, Numeraire 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 Numeraire will offset losses from the drop in Numeraire's long position.The idea behind The Open Network and Numeraire 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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