Correlation Between Axie Infinity and Braintrust

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

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

Diversification Opportunities for Axie Infinity and Braintrust

0.33

Correlation Coefficient

Axie Infinity  Braintrust

Weak diversification

The 3 months correlation between Axie and Braintrust is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Axie Infinity Shards and Braintrust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Braintrust and Axie Infinity 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 Axie Infinity Shards are associated (or correlated) with Braintrust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Braintrust has no effect on the direction of Axie Infinity i.e., Axie Infinity and Braintrust go up and down completely randomly.

Pair Corralation between Axie Infinity and Braintrust

Assuming the 90 days trading horizon Axie Infinity is expected to generate 1.44 times less return on investment than Braintrust. In addition to that, Axie Infinity is 1.09 times more volatile than Braintrust. It trades about 0.08 of its total potential returns per unit of risk. Braintrust is currently generating about 0.13 per unit of volatility. If you would invest  40.00  in Braintrust on January 19, 2024 and sell it today you would earn a total of  40.00  from holding Braintrust or generate 100.0% return on investment over 90 days.

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

Axie Infinity Shards  vs.  Braintrust

Axie Infinity Shards

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Axie Infinity Shards has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Axie Infinity is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Braintrust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Braintrust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Braintrust is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Axie Infinity and Braintrust

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

The idea behind Axie Infinity Shards and Braintrust 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.