Correlation Between ApeCoin and Boba Network

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

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

Diversification Opportunities for ApeCoin and Boba Network

0.66

Correlation Coefficient

ApeCoin  Boba Network

Poor diversification

The 3 months correlation between ApeCoin and Boba is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding ApeCoin and Boba Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boba Network and ApeCoin 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 ApeCoin are associated (or correlated) with Boba Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boba Network has no effect on the direction of ApeCoin i.e., ApeCoin and Boba Network go up and down completely randomly.

Pair Corralation between ApeCoin and Boba Network

Assuming the 90 days trading horizon ApeCoin is expected to under-perform the Boba Network. But the crypto coin apears to be less risky and, when comparing its historical volatility, ApeCoin is 2.34 times less risky than Boba Network. The crypto coin trades about -0.07 of its potential returns per unit of risk. The Boba Network is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  22.00  in Boba Network on January 20, 2024 and sell it today you would earn a total of  21.00  from holding Boba Network or generate 95.45% return on investment over 90 days.

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

ApeCoin  vs.  Boba Network

ApeCoin

Risk-Adjusted Performance

1 of 100

Weak

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

Boba Network

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Boba Network are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Boba Network exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ApeCoin and Boba Network

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

The idea behind ApeCoin and Boba Network 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.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.