Correlation Between Cardano and Coin98

Can any of the company-specific risk be diversified away by investing in both Cardano and Coin98 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 Cardano and Coin98 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cardano and Coin98, you can compare the effects of market volatilities on Cardano and Coin98 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 Cardano with a short position of Coin98. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardano and Coin98.

Diversification Opportunities for Cardano and Coin98

0.86

Correlation Coefficient

Cardano  Coin98

Very poor diversification

The 3 months correlation between Cardano and Coin98 is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Cardano and Coin98 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coin98 and Cardano 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 Cardano are associated (or correlated) with Coin98. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coin98 has no effect on the direction of Cardano i.e., Cardano and Coin98 go up and down completely randomly.

Pair Corralation between Cardano and Coin98

Assuming the 90 days trading horizon Cardano is expected to under-perform the Coin98. But the crypto coin apears to be less risky and, when comparing its historical volatility, Cardano is 1.43 times less risky than Coin98. The crypto coin trades about -0.05 of its potential returns per unit of risk. The Coin98 is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  28.00  in Coin98 on February 11, 2024 and sell it today you would lose (1.00) from holding Coin98 or give up 3.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Cardano  vs.  Coin98

Cardano

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cardano has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's basic indicators remain rather sound which may send shares a bit higher in June 2024. The latest tumult may also be a sign of longer-term up-swing for Cardano shareholders.

Coin98

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Coin98 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Coin98 may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Cardano and Coin98

The main advantage of trading using opposite Cardano and Coin98 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardano position performs unexpectedly, Coin98 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 Coin98 will offset losses from the drop in Coin98's long position.

The idea behind Cardano and Coin98 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.