Correlation Between Uniswap Protocol and DATA
Can any of the company-specific risk be diversified away by investing in both Uniswap Protocol and DATA 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 DATA 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 DATA, you can compare the effects of market volatilities on Uniswap Protocol and DATA 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 DATA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uniswap Protocol and DATA.
Diversification Opportunities for Uniswap Protocol and DATA
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Uniswap and DATA is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Uniswap Protocol Token and DATA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DATA 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 DATA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DATA has no effect on the direction of Uniswap Protocol i.e., Uniswap Protocol and DATA go up and down completely randomly.
Pair Corralation between Uniswap Protocol and DATA
Assuming the 90 days trading horizon Uniswap Protocol Token is expected to under-perform the DATA. But the crypto coin apears to be less risky and, when comparing its historical volatility, Uniswap Protocol Token is 1.28 times less risky than DATA. The crypto coin trades about -0.33 of its potential returns per unit of risk. The DATA is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 7.77 in DATA on January 25, 2024 and sell it today you would lose (0.90) from holding DATA or give up 11.58% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Uniswap Protocol Token vs. DATA
Performance |
Timeline |
Uniswap Protocol Token |
DATA |
Uniswap Protocol and DATA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Uniswap Protocol and DATA
The main advantage of trading using opposite Uniswap Protocol and DATA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uniswap Protocol position performs unexpectedly, DATA 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 DATA will offset losses from the drop in DATA'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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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