Correlation Between EOSDAC and VTC

Can any of the company-specific risk be diversified away by investing in both EOSDAC and VTC 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 EOSDAC and VTC into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between EOSDAC and VTC, you can compare the effects of market volatilities on EOSDAC and VTC 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 EOSDAC with a short position of VTC. Check out your portfolio center. Please also check ongoing floating volatility patterns of EOSDAC and VTC.

Diversification Opportunities for EOSDAC and VTC

-0.26

Correlation Coefficient

EOSDAC  VTC

Very good diversification

The 3 months correlation between EOSDAC and VTC is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding EOSDAC and VTC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VTC and EOSDAC 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 EOSDAC are associated (or correlated) with VTC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VTC has no effect on the direction of EOSDAC i.e., EOSDAC and VTC go up and down completely randomly.

Pair Corralation between EOSDAC and VTC

Assuming the 90 days trading horizon EOSDAC is expected to under-perform the VTC. In addition to that, EOSDAC is 1.91 times more volatile than VTC. It trades about -0.06 of its total potential returns per unit of risk. VTC is currently generating about 0.13 per unit of volatility. If you would invest  5.37  in VTC on January 25, 2025 and sell it today you would earn a total of  1.95  from holding VTC or generate 36.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

EOSDAC  vs.  VTC

EOSDAC

Risk-Adjusted Performance

Very Weak

Over the last 90 days EOSDAC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Crypto's basic indicators remain somewhat strong which may send shares a bit higher in May 2025. The current disturbance may also be a sign of long term up-swing for EOSDAC investors.

VTC

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VTC are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, VTC exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EOSDAC and VTC

The main advantage of trading using opposite EOSDAC and VTC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EOSDAC position performs unexpectedly, VTC 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 VTC will offset losses from the drop in VTC's long position.

The idea behind EOSDAC and VTC 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.

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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .