Correlation Between Open Network and 1inch

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Can any of the company-specific risk be diversified away by investing in both Open Network and 1inch 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 Open Network and 1inch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Open Network and 1inch, you can compare the effects of market volatilities on Open Network and 1inch 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 Open Network with a short position of 1inch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Open Network and 1inch.

Diversification Opportunities for Open Network and 1inch

0.74
  Correlation Coefficient

Poor diversification

The 3 months correlation between Open and 1inch is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding The Open Network and 1inch in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1inch and Open 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 The Open Network are associated (or correlated) with 1inch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1inch has no effect on the direction of Open Network i.e., Open Network and 1inch go up and down completely randomly.

Pair Corralation between Open Network and 1inch

Assuming the 90 days trading horizon Open Network is expected to generate 31.3 times less return on investment than 1inch. But when comparing it to its historical volatility, The Open Network is 1.17 times less risky than 1inch. It trades about 0.0 of its potential returns per unit of risk. 1inch is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  41.00  in 1inch on April 22, 2024 and sell it today you would earn a total of  1.00  from holding 1inch or generate 2.44% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

The Open Network  vs.  1inch

 Performance 
       Timeline  
Open Network 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in The Open Network are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Open Network displayed solid returns over the last few months and may actually be approaching a breakup point.
1inch 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days 1inch has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical indicators, 1inch is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Open Network and 1inch Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Open Network and 1inch

The main advantage of trading using opposite Open Network and 1inch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Open Network position performs unexpectedly, 1inch 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 1inch will offset losses from the drop in 1inch's long position.
The idea behind The Open Network and 1inch 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

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