Correlation Between Phala Network and Beldex

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

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

Diversification Opportunities for Phala Network and Beldex

0.65

Correlation Coefficient

Phala Network  Beldex

Poor diversification

The 3 months correlation between Phala and Beldex is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Phala Network and Beldex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beldex and Phala 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 Phala Network are associated (or correlated) with Beldex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beldex has no effect on the direction of Phala Network i.e., Phala Network and Beldex go up and down completely randomly.

Pair Corralation between Phala Network and Beldex

Assuming the 90 days trading horizon Phala Network is expected to under-perform the Beldex. In addition to that, Phala Network is 4.8 times more volatile than Beldex. It trades about -0.26 of its total potential returns per unit of risk. Beldex is currently generating about -0.16 per unit of volatility. If you would invest  8.10  in Beldex on January 15, 2025 and sell it today you would lose (1.28) from holding Beldex or give up 15.8% of portfolio value over 90 days.

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

Phala Network  vs.  Beldex

Phala Network

Risk-Adjusted Performance

Very Weak

Over the last 90 days Phala Network has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's basic indicators remain rather sound which may send shares a bit higher in May 2025. The latest tumult may also be a sign of longer-term up-swing for Phala Network shareholders.

Beldex

Risk-Adjusted Performance

Very Weak

Over the last 90 days Beldex has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's basic indicators remain rather sound which may send shares a bit higher in May 2025. The latest tumult may also be a sign of longer-term up-swing for Beldex shareholders.

Pair Trading with Phala Network and Beldex

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

The idea behind Phala Network and Beldex 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.