Correlation Between Origin Protocol and Gnosis
Can any of the company-specific risk be diversified away by investing in both Origin Protocol and Gnosis 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 Origin Protocol and Gnosis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Protocol and Gnosis, you can compare the effects of market volatilities on Origin Protocol and Gnosis 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 Origin Protocol with a short position of Gnosis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Protocol and Gnosis.
Diversification Opportunities for Origin Protocol and Gnosis
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Origin and Gnosis is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Origin Protocol and Gnosis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gnosis and Origin Protocol 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 Origin Protocol are associated (or correlated) with Gnosis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gnosis has no effect on the direction of Origin Protocol i.e., Origin Protocol and Gnosis go up and down completely randomly.
Pair Corralation between Origin Protocol and Gnosis
Assuming the 90 days trading horizon Origin Protocol is expected to generate 1.73 times less return on investment than Gnosis. In addition to that, Origin Protocol is 1.48 times more volatile than Gnosis. It trades about 0.05 of its total potential returns per unit of risk. Gnosis is currently generating about 0.13 per unit of volatility. If you would invest 10,764 in Gnosis on January 20, 2024 and sell it today you would earn a total of 23,374 from holding Gnosis or generate 217.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Protocol vs. Gnosis
Performance |
| Timeline |
| Origin Protocol |
| Gnosis |
Origin Protocol and Gnosis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Protocol and Gnosis
The main advantage of trading using opposite Origin Protocol and Gnosis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Protocol position performs unexpectedly, Gnosis 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 Gnosis will offset losses from the drop in Gnosis' long position.| Origin Protocol vs. Solana | Origin Protocol vs. XRP | Origin Protocol vs. The Open Network | Origin Protocol 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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