Correlation Between Origin Protocol and Polygon
Can any of the company-specific risk be diversified away by investing in both Origin Protocol and Polygon 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 Polygon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Protocol and Polygon, you can compare the effects of market volatilities on Origin Protocol and Polygon 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 Polygon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Protocol and Polygon.
Diversification Opportunities for Origin Protocol and Polygon
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Origin and Polygon is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Origin Protocol and Polygon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polygon 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 Polygon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polygon has no effect on the direction of Origin Protocol i.e., Origin Protocol and Polygon go up and down completely randomly.
Pair Corralation between Origin Protocol and Polygon
Assuming the 90 days trading horizon Origin Protocol is expected to generate 1.4 times more return on investment than Polygon. However, Origin Protocol is 1.4 times more volatile than Polygon. It trades about -0.12 of its potential returns per unit of risk. Polygon is currently generating about -0.23 per unit of risk. If you would invest 21.00 in Origin Protocol on January 26, 2024 and sell it today you would lose (5.00) from holding Origin Protocol or give up 23.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Protocol vs. Polygon
Performance |
| Timeline |
| Origin Protocol |
| Polygon |
Origin Protocol and Polygon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Protocol and Polygon
The main advantage of trading using opposite Origin Protocol and Polygon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Protocol position performs unexpectedly, Polygon 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 Polygon will offset losses from the drop in Polygon'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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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