Correlation Between WAL Token and CAPP

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

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

Diversification Opportunities for WAL Token and CAPP

-0.44

Correlation Coefficient

WAL Token  CAPP

Very good diversification

The 3 months correlation between WAL and CAPP is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding WAL Token and CAPP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAPP and WAL Token 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 WAL Token are associated (or correlated) with CAPP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAPP has no effect on the direction of WAL Token i.e., WAL Token and CAPP go up and down completely randomly.

Pair Corralation between WAL Token and CAPP

Assuming the 90 days trading horizon WAL Token is expected to under-perform the CAPP. In addition to that, WAL Token is 2.8 times more volatile than CAPP. It trades about -0.05 of its total potential returns per unit of risk. CAPP is currently generating about 0.19 per unit of volatility. If you would invest  0.01  in CAPP on May 1, 2025 and sell it today you would earn a total of  0.00  from holding CAPP or generate 25.86% return on investment over 90 days.

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

WAL Token  vs.  CAPP

WAL Token

Risk-Adjusted Performance

Very Weak

Over the last 90 days WAL Token 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 essential indicators remain rather sound which may send shares a bit higher in August 2025. The latest tumult may also be a sign of longer-term up-swing for WAL Token shareholders.

CAPP

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CAPP are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, CAPP exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with WAL Token and CAPP

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

The idea behind WAL Token and CAPP 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.