Correlation Between Starknet and Raydium

Can any of the company-specific risk be diversified away by investing in both Starknet and Raydium 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 Starknet and Raydium into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Starknet and Raydium, you can compare the effects of market volatilities on Starknet and Raydium 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 Starknet with a short position of Raydium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Starknet and Raydium.

Diversification Opportunities for Starknet and Raydium

0.04

Correlation Coefficient

Starknet  Raydium

Significant diversification

The 3 months correlation between Starknet and Raydium is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Starknet and Raydium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raydium and Starknet 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 Starknet are associated (or correlated) with Raydium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raydium has no effect on the direction of Starknet i.e., Starknet and Raydium go up and down completely randomly.

Pair Corralation between Starknet and Raydium

Assuming the 90 days trading horizon Starknet is expected to generate 22.11 times more return on investment than Raydium. However, Starknet is 22.11 times more volatile than Raydium. It trades about 0.17 of its potential returns per unit of risk. Raydium is currently generating about 0.16 per unit of risk. If you would invest  0.00  in Starknet on February 20, 2024 and sell it today you would earn a total of  116.00  from holding Starknet or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Starknet  vs.  Raydium

Starknet

Risk-Adjusted Performance

13 of 100

Good

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

Raydium

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Raydium are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Raydium exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Starknet and Raydium

The main advantage of trading using opposite Starknet and Raydium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Starknet position performs unexpectedly, Raydium 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 Raydium will offset losses from the drop in Raydium's long position.

The idea behind Starknet and Raydium 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..