Correlation Between Origin Protocol and MCO
Can any of the company-specific risk be diversified away by investing in both Origin Protocol and MCO 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 MCO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Protocol and MCO, you can compare the effects of market volatilities on Origin Protocol and MCO 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 MCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Protocol and MCO.
Diversification Opportunities for Origin Protocol and MCO
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Origin and MCO is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Origin Protocol and MCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCO 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 MCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCO has no effect on the direction of Origin Protocol i.e., Origin Protocol and MCO go up and down completely randomly.
Pair Corralation between Origin Protocol and MCO
Assuming the 90 days trading horizon Origin Protocol is expected to under-perform the MCO. But the crypto coin apears to be less risky and, when comparing its historical volatility, Origin Protocol is 26.95 times less risky than MCO. The crypto coin trades about -0.11 of its potential returns per unit of risk. The MCO is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 85.00 in MCO on January 25, 2024 and sell it today you would earn a total of 1,240 from holding MCO or generate 1458.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Origin Protocol vs. MCO
Performance |
Timeline |
Origin Protocol |
MCO |
Origin Protocol and MCO Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Origin Protocol and MCO
The main advantage of trading using opposite Origin Protocol and MCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Protocol position performs unexpectedly, MCO 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 MCO will offset losses from the drop in MCO's long position.Origin Protocol vs. Solana | Origin Protocol vs. XRP | Origin Protocol vs. Staked Ether | Origin Protocol 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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