Correlation Between MANTRA and DeBridge

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

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

Diversification Opportunities for MANTRA and DeBridge

-0.68

Correlation Coefficient

MANTRA  DeBridge

Excellent diversification

The 3 months correlation between MANTRA and DeBridge is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding MANTRA and deBridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on deBridge and MANTRA 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 MANTRA are associated (or correlated) with DeBridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of deBridge has no effect on the direction of MANTRA i.e., MANTRA and DeBridge go up and down completely randomly.

Pair Corralation between MANTRA and DeBridge

Assuming the 90 days horizon MANTRA is expected to generate 0.64 times more return on investment than DeBridge. However, MANTRA is 1.55 times less risky than DeBridge. It trades about 0.04 of its potential returns per unit of risk. deBridge is currently generating about -0.03 per unit of risk. If you would invest  631.00  in MANTRA on January 11, 2025 and sell it today you would earn a total of  10.00  from holding MANTRA or generate 1.58% return on investment over 90 days.

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

MANTRA  vs.  deBridge

MANTRA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MANTRA are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, MANTRA exhibited solid returns over the last few months and may actually be approaching a breakup point.

deBridge

Risk-Adjusted Performance

Very Weak

Over the last 90 days deBridge has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Crypto's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for deBridge shareholders.

Pair Trading with MANTRA and DeBridge

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

The idea behind MANTRA and deBridge 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.