Correlation Between Cardano and PancakeSwap
Can any of the company-specific risk be diversified away by investing in both Cardano and PancakeSwap 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 PancakeSwap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardano and PancakeSwap, you can compare the effects of market volatilities on Cardano and PancakeSwap 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 PancakeSwap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardano and PancakeSwap.
Diversification Opportunities for Cardano and PancakeSwap
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cardano and PancakeSwap is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Cardano and PancakeSwap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PancakeSwap 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 PancakeSwap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PancakeSwap has no effect on the direction of Cardano i.e., Cardano and PancakeSwap go up and down completely randomly.
Pair Corralation between Cardano and PancakeSwap
Assuming the 90 days trading horizon Cardano is expected to generate 0.92 times more return on investment than PancakeSwap. However, Cardano is 1.08 times less risky than PancakeSwap. It trades about 0.01 of its potential returns per unit of risk. PancakeSwap is currently generating about -0.01 per unit of risk. If you would invest 76.00 in Cardano on January 26, 2024 and sell it today you would lose (26.00) from holding Cardano or give up 34.21% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Cardano vs. PancakeSwap
Performance |
Timeline |
Cardano |
PancakeSwap |
Cardano and PancakeSwap Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cardano and PancakeSwap
The main advantage of trading using opposite Cardano and PancakeSwap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardano position performs unexpectedly, PancakeSwap 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 PancakeSwap will offset losses from the drop in PancakeSwap's long position.The idea behind Cardano and PancakeSwap 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.PancakeSwap vs. Solana | PancakeSwap vs. XRP | PancakeSwap vs. Staked Ether | PancakeSwap 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
Stocks Directory Find actively traded stocks across global markets |