Correlation Between LAMB and Gatechain Token
Can any of the company-specific risk be diversified away by investing in both LAMB and Gatechain Token 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 LAMB and Gatechain Token into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LAMB and Gatechain Token, you can compare the effects of market volatilities on LAMB and Gatechain Token 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 LAMB with a short position of Gatechain Token. Check out your portfolio center. Please also check ongoing floating volatility patterns of LAMB and Gatechain Token.
Diversification Opportunities for LAMB and Gatechain Token
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between LAMB and Gatechain is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding LAMB and Gatechain Token in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gatechain Token and LAMB 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 LAMB are associated (or correlated) with Gatechain Token. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gatechain Token has no effect on the direction of LAMB i.e., LAMB and Gatechain Token go up and down completely randomly.
Pair Corralation between LAMB and Gatechain Token
Assuming the 90 days trading horizon LAMB is expected to under-perform the Gatechain Token. In addition to that, LAMB is 1.69 times more volatile than Gatechain Token. It trades about -0.18 of its total potential returns per unit of risk. Gatechain Token is currently generating about -0.18 per unit of volatility. If you would invest 940.00 in Gatechain Token on January 26, 2024 and sell it today you would lose (189.00) from holding Gatechain Token or give up 20.11% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
LAMB vs. Gatechain Token
Performance |
Timeline |
LAMB |
Gatechain Token |
LAMB and Gatechain Token Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with LAMB and Gatechain Token
The main advantage of trading using opposite LAMB and Gatechain Token positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LAMB position performs unexpectedly, Gatechain Token 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 Gatechain Token will offset losses from the drop in Gatechain Token's long position.The idea behind LAMB and Gatechain Token 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.Gatechain Token vs. Solana | Gatechain Token vs. XRP | Gatechain Token vs. Staked Ether | Gatechain Token vs. The Open Network |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Technical Analysis Check basic technical indicators and analysis based on most latest market data |