Correlation Between Klaytn and POLY
Can any of the company-specific risk be diversified away by investing in both Klaytn and POLY 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 Klaytn and POLY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Klaytn and POLY, you can compare the effects of market volatilities on Klaytn and POLY 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 Klaytn with a short position of POLY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Klaytn and POLY.
Diversification Opportunities for Klaytn and POLY
Excellent diversification
The 3 months correlation between Klaytn and POLY is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Klaytn and POLY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POLY and Klaytn 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 Klaytn are associated (or correlated) with POLY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of POLY has no effect on the direction of Klaytn i.e., Klaytn and POLY go up and down completely randomly.
Pair Corralation between Klaytn and POLY
Assuming the 90 days trading horizon Klaytn is expected to under-perform the POLY. But the crypto coin apears to be less risky and, when comparing its historical volatility, Klaytn is 19.63 times less risky than POLY. The crypto coin trades about -0.19 of its potential returns per unit of risk. The POLY is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 4.90 in POLY on January 24, 2024 and sell it today you would earn a total of 3.10 from holding POLY or generate 63.27% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Klaytn vs. POLY
Performance |
Timeline |
Klaytn |
POLY |
Klaytn and POLY Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Klaytn and POLY
The main advantage of trading using opposite Klaytn and POLY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Klaytn position performs unexpectedly, POLY 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 POLY will offset losses from the drop in POLY's long position.The idea behind Klaytn and POLY 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Money Managers Screen money managers from public funds and ETFs managed around the world | |
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
Stocks Directory Find actively traded stocks across global markets | |
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |