Correlation Between Cosmos and USD Coin

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

Diversification Opportunities for Cosmos and USD Coin

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Cosmos and USD is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cosmos and USD Coin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USD Coin and Cosmos 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 Cosmos are associated (or correlated) with USD Coin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USD Coin has no effect on the direction of Cosmos i.e., Cosmos and USD Coin go up and down completely randomly.

Pair Corralation between Cosmos and USD Coin

Assuming the 90 days trading horizon Cosmos is expected to generate 27.84 times more return on investment than USD Coin. However, Cosmos is 27.84 times more volatile than USD Coin. It trades about 0.0 of its potential returns per unit of risk. USD Coin is currently generating about 0.0 per unit of risk. If you would invest  2,463  in Cosmos on December 30, 2023 and sell it today you would lose (1,230) from holding Cosmos or give up 49.94% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Cosmos  vs.  USD Coin

 Performance 
       Timeline  
Cosmos 

Risk-Adjusted Performance

7 of 100

 
Low
 
High
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Cosmos are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Cosmos exhibited solid returns over the last few months and may actually be approaching a breakup point.
USD Coin 

Risk-Adjusted Performance

0 of 100

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

Cosmos and USD Coin Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Cosmos and USD Coin

The main advantage of trading using opposite Cosmos and USD Coin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cosmos position performs unexpectedly, USD Coin 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 USD Coin will offset losses from the drop in USD Coin's long position.
The idea behind Cosmos and USD Coin 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.

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