Correlation Between DATA and Storj

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

Diversification Opportunities for DATA and Storj

0.76
  Correlation Coefficient

Poor diversification

The 3 months correlation between DATA and Storj is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding DATA and Storj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Storj 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 Storj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Storj has no effect on the direction of DATA i.e., DATA and Storj go up and down completely randomly.

Pair Corralation between DATA and Storj

Assuming the 90 days trading horizon DATA is expected to generate 1.03 times more return on investment than Storj. However, DATA is 1.03 times more volatile than Storj. It trades about 0.07 of its potential returns per unit of risk. Storj is currently generating about 0.05 per unit of risk. If you would invest  6.75  in DATA on December 29, 2023 and sell it today you would earn a total of  0.42  from holding DATA or generate 6.22% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

DATA  vs.  Storj

 Performance 
       Timeline  
DATA 

Risk-Adjusted Performance

8 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in DATA are ranked lower than 8 (%) 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.
Storj 

Risk-Adjusted Performance

3 of 100

 
Low
 
High
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Storj are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady forward-looking indicators, Storj exhibited solid returns over the last few months and may actually be approaching a breakup point.

DATA and Storj Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with DATA and Storj

The main advantage of trading using opposite DATA and Storj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DATA position performs unexpectedly, Storj 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 Storj will offset losses from the drop in Storj's long position.
The idea behind DATA and Storj 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.

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