Correlation Between Phala Network and LAMB
Can any of the company-specific risk be diversified away by investing in both Phala Network and LAMB 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 Phala Network and LAMB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phala Network and LAMB, you can compare the effects of market volatilities on Phala Network and LAMB 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 Phala Network with a short position of LAMB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phala Network and LAMB.
Diversification Opportunities for Phala Network and LAMB
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Phala and LAMB is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Phala Network and LAMB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LAMB and Phala Network 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 Phala Network are associated (or correlated) with LAMB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LAMB has no effect on the direction of Phala Network i.e., Phala Network and LAMB go up and down completely randomly.
Pair Corralation between Phala Network and LAMB
Assuming the 90 days trading horizon Phala Network is expected to generate 2.39 times less return on investment than LAMB. But when comparing it to its historical volatility, Phala Network is 1.78 times less risky than LAMB. It trades about 0.09 of its potential returns per unit of risk. LAMB is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 0.15 in LAMB on January 24, 2024 and sell it today you would earn a total of 0.54 from holding LAMB or generate 370.98% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Phala Network vs. LAMB
Performance |
Timeline |
Phala Network |
LAMB |
Phala Network and LAMB Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Phala Network and LAMB
The main advantage of trading using opposite Phala Network and LAMB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phala Network position performs unexpectedly, LAMB 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 LAMB will offset losses from the drop in LAMB's long position.Phala Network vs. Solana | Phala Network vs. XRP | Phala Network vs. The Open Network | Phala Network vs. Staked Ether |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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