Correlation Between Axie Infinity and CHSB

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Can any of the company-specific risk be diversified away by investing in both Axie Infinity and CHSB 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 CHSB 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 CHSB, you can compare the effects of market volatilities on Axie Infinity and CHSB 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 CHSB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axie Infinity and CHSB.

Diversification Opportunities for Axie Infinity and CHSB

0.11
  Correlation Coefficient

Average diversification

The 3 months correlation between Axie and CHSB is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Axie Infinity Shards and CHSB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHSB 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 CHSB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHSB has no effect on the direction of Axie Infinity i.e., Axie Infinity and CHSB go up and down completely randomly.

Pair Corralation between Axie Infinity and CHSB

Assuming the 90 days trading horizon Axie Infinity is expected to generate 5.99 times less return on investment than CHSB. But when comparing it to its historical volatility, Axie Infinity Shards is 4.43 times less risky than CHSB. It trades about 0.16 of its potential returns per unit of risk. CHSB is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  18.00  in CHSB on December 29, 2023 and sell it today you would earn a total of  25.00  from holding CHSB or generate 138.89% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Axie Infinity Shards  vs.  CHSB

 Performance 
       Timeline  
Axie Infinity Shards 

Risk-Adjusted Performance

6 of 100

 
Low
 
High
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Axie Infinity Shards are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Axie Infinity exhibited solid returns over the last few months and may actually be approaching a breakup point.
CHSB 

Risk-Adjusted Performance

10 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in CHSB are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, CHSB exhibited solid returns over the last few months and may actually be approaching a breakup point.

Axie Infinity and CHSB Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Axie Infinity and CHSB

The main advantage of trading using opposite Axie Infinity and CHSB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axie Infinity position performs unexpectedly, CHSB 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 CHSB will offset losses from the drop in CHSB's long position.
The idea behind Axie Infinity Shards and CHSB 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.

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