Correlation Between DATA and Siacoin

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Can any of the company-specific risk be diversified away by investing in both DATA and Siacoin 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 DATA and Siacoin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DATA and Siacoin, you can compare the effects of market volatilities on DATA and Siacoin 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 DATA with a short position of Siacoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of DATA and Siacoin.

Diversification Opportunities for DATA and Siacoin

0.31
  Correlation Coefficient

Weak diversification

The 3 months correlation between DATA and Siacoin is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding DATA and Siacoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siacoin and DATA 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 DATA are associated (or correlated) with Siacoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siacoin has no effect on the direction of DATA i.e., DATA and Siacoin go up and down completely randomly.

Pair Corralation between DATA and Siacoin

Assuming the 90 days trading horizon DATA is expected to generate 1.42 times more return on investment than Siacoin. However, DATA is 1.42 times more volatile than Siacoin. It trades about 0.05 of its potential returns per unit of risk. Siacoin is currently generating about 0.05 per unit of risk. If you would invest  4.15  in DATA on December 30, 2023 and sell it today you would earn a total of  4.15  from holding DATA or generate 100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

DATA  vs.  Siacoin

 Performance 
       Timeline  
DATA 

Risk-Adjusted Performance

13 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in DATA are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, DATA exhibited solid returns over the last few months and may actually be approaching a breakup point.
Siacoin 

Risk-Adjusted Performance

8 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Siacoin are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Siacoin exhibited solid returns over the last few months and may actually be approaching a breakup point.

DATA and Siacoin Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with DATA and Siacoin

The main advantage of trading using opposite DATA and Siacoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DATA position performs unexpectedly, Siacoin 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 Siacoin will offset losses from the drop in Siacoin's long position.
The idea behind DATA and Siacoin 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..

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