Correlation Between Chainlink and Lisk
Can any of the company-specific risk be diversified away by investing in both Chainlink and Lisk 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 Chainlink and Lisk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chainlink and Lisk, you can compare the effects of market volatilities on Chainlink and Lisk 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 Chainlink with a short position of Lisk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chainlink and Lisk.
Diversification Opportunities for Chainlink and Lisk
Weak diversification
The 3 months correlation between Chainlink and Lisk is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Chainlink and Lisk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lisk and Chainlink 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 Chainlink are associated (or correlated) with Lisk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lisk has no effect on the direction of Chainlink i.e., Chainlink and Lisk go up and down completely randomly.
Pair Corralation between Chainlink and Lisk
Assuming the 90 days trading horizon Chainlink is expected to under-perform the Lisk. But the crypto coin apears to be less risky and, when comparing its historical volatility, Chainlink is 2.53 times less risky than Lisk. The crypto coin trades about -0.06 of its potential returns per unit of risk. The Lisk is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 136.00 in Lisk on January 24, 2024 and sell it today you would earn a total of 47.00 from holding Lisk or generate 34.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Chainlink vs. Lisk
Performance |
| Timeline |
| Chainlink |
| Lisk |
Chainlink and Lisk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chainlink and Lisk
The main advantage of trading using opposite Chainlink and Lisk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chainlink position performs unexpectedly, Lisk 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 Lisk will offset losses from the drop in Lisk's long position.The idea behind Chainlink and Lisk 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.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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |