Correlation Between ARPA Chain and Aave
Can any of the company-specific risk be diversified away by investing in both ARPA Chain and Aave 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 ARPA Chain and Aave into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ARPA Chain and Aave, you can compare the effects of market volatilities on ARPA Chain and Aave 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 ARPA Chain with a short position of Aave. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARPA Chain and Aave.
Diversification Opportunities for ARPA Chain and Aave
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ARPA and Aave is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding ARPA Chain and Aave in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aave and ARPA Chain 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 ARPA Chain are associated (or correlated) with Aave. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aave has no effect on the direction of ARPA Chain i.e., ARPA Chain and Aave go up and down completely randomly.
Pair Corralation between ARPA Chain and Aave
Assuming the 90 days trading horizon ARPA Chain is expected to generate 1.41 times more return on investment than Aave. However, ARPA Chain is 1.41 times more volatile than Aave. It trades about 0.05 of its potential returns per unit of risk. Aave is currently generating about -0.01 per unit of risk. If you would invest 6.47 in ARPA Chain on January 19, 2024 and sell it today you would earn a total of 0.38 from holding ARPA Chain or generate 5.87% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
ARPA Chain vs. Aave
Performance |
Timeline |
ARPA Chain |
Aave |
ARPA Chain and Aave Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ARPA Chain and Aave
The main advantage of trading using opposite ARPA Chain and Aave positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARPA Chain position performs unexpectedly, Aave 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 Aave will offset losses from the drop in Aave's long position.ARPA Chain vs. Staked Ether | ARPA Chain vs. XCAD Network | ARPA Chain vs. Phala Network | ARPA Chain vs. EOSDAC |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
Transaction History View history of all your transactions and understand their impact on performance |