Correlation Between Origin Protocol and Litecoin
Can any of the company-specific risk be diversified away by investing in both Origin Protocol and Litecoin 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 Litecoin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Protocol and Litecoin, you can compare the effects of market volatilities on Origin Protocol and Litecoin 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 Litecoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Protocol and Litecoin.
Diversification Opportunities for Origin Protocol and Litecoin
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Origin and Litecoin is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Origin Protocol and Litecoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Litecoin 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 Litecoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Litecoin has no effect on the direction of Origin Protocol i.e., Origin Protocol and Litecoin go up and down completely randomly.
Pair Corralation between Origin Protocol and Litecoin
Assuming the 90 days trading horizon Origin Protocol is expected to under-perform the Litecoin. In addition to that, Origin Protocol is 1.37 times more volatile than Litecoin. It trades about -0.12 of its total potential returns per unit of risk. Litecoin is currently generating about -0.05 per unit of volatility. If you would invest 9,352 in Litecoin on January 26, 2024 and sell it today you would lose (870.00) from holding Litecoin or give up 9.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Protocol vs. Litecoin
Performance |
| Timeline |
| Origin Protocol |
| Litecoin |
Origin Protocol and Litecoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Protocol and Litecoin
The main advantage of trading using opposite Origin Protocol and Litecoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Protocol position performs unexpectedly, Litecoin 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 Litecoin will offset losses from the drop in Litecoin'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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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