Correlation Between Uniswap Protocol and ARK
Can any of the company-specific risk be diversified away by investing in both Uniswap Protocol and ARK 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 Uniswap Protocol and ARK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uniswap Protocol Token and ARK, you can compare the effects of market volatilities on Uniswap Protocol and ARK 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 Uniswap Protocol with a short position of ARK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uniswap Protocol and ARK.
Diversification Opportunities for Uniswap Protocol and ARK
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Uniswap and ARK is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Uniswap Protocol Token and ARK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARK and Uniswap Protocol 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 Uniswap Protocol Token are associated (or correlated) with ARK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARK has no effect on the direction of Uniswap Protocol i.e., Uniswap Protocol and ARK go up and down completely randomly.
Pair Corralation between Uniswap Protocol and ARK
Assuming the 90 days trading horizon Uniswap Protocol Token is expected to under-perform the ARK. In addition to that, Uniswap Protocol is 1.02 times more volatile than ARK. It trades about -0.32 of its total potential returns per unit of risk. ARK is currently generating about -0.21 per unit of volatility. If you would invest 109.00 in ARK on January 26, 2024 and sell it today you would lose (28.00) from holding ARK or give up 25.69% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Uniswap Protocol Token vs. ARK
Performance |
Timeline |
Uniswap Protocol Token |
ARK |
Uniswap Protocol and ARK Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Uniswap Protocol and ARK
The main advantage of trading using opposite Uniswap Protocol and ARK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uniswap Protocol position performs unexpectedly, ARK 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 ARK will offset losses from the drop in ARK's long position.Uniswap Protocol vs. Solana | Uniswap Protocol vs. XRP | Uniswap Protocol vs. Staked Ether | Uniswap Protocol vs. The Open Network |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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