Correlation Between KuCoin Token and KMD
Can any of the company-specific risk be diversified away by investing in both KuCoin Token and KMD 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 KuCoin Token and KMD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KuCoin Token and KMD, you can compare the effects of market volatilities on KuCoin Token and KMD 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 KuCoin Token with a short position of KMD. Check out your portfolio center. Please also check ongoing floating volatility patterns of KuCoin Token and KMD.
Diversification Opportunities for KuCoin Token and KMD
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between KuCoin and KMD is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding KuCoin Token and KMD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KMD and KuCoin 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 KuCoin Token are associated (or correlated) with KMD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KMD has no effect on the direction of KuCoin Token i.e., KuCoin Token and KMD go up and down completely randomly.
Pair Corralation between KuCoin Token and KMD
Assuming the 90 days trading horizon KuCoin Token is expected to generate 1.47 times less return on investment than KMD. But when comparing it to its historical volatility, KuCoin Token is 1.32 times less risky than KMD. It trades about 0.06 of its potential returns per unit of risk. KMD is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 25.00 in KMD on January 17, 2024 and sell it today you would earn a total of 15.00 from holding KMD or generate 60.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KuCoin Token vs. KMD
Performance |
| Timeline |
| KuCoin Token |
| KMD |
KuCoin Token and KMD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KuCoin Token and KMD
The main advantage of trading using opposite KuCoin Token and KMD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KuCoin Token position performs unexpectedly, KMD 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 KMD will offset losses from the drop in KMD's long position.| KuCoin Token vs. Solana | KuCoin Token vs. XRP | KuCoin Token vs. The Open Network | KuCoin Token vs. Staked Ether |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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