Correlation Between Avalanche and Tether Gold

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

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

Diversification Opportunities for Avalanche and Tether Gold

-0.41

Correlation Coefficient

Avalanche  Tether Gold

Very good diversification

The 3 months correlation between Avalanche and Tether is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Avalanche and Tether Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tether Gold and Avalanche 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 Avalanche are associated (or correlated) with Tether Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tether Gold has no effect on the direction of Avalanche i.e., Avalanche and Tether Gold go up and down completely randomly.

Pair Corralation between Avalanche and Tether Gold

Assuming the 90 days trading horizon Avalanche is expected to generate 4.03 times more return on investment than Tether Gold. However, Avalanche is 4.03 times more volatile than Tether Gold. It trades about 0.05 of its potential returns per unit of risk. Tether Gold is currently generating about 0.02 per unit of risk. If you would invest  2,235  in Avalanche on April 22, 2025 and sell it today you would earn a total of  216.00  from holding Avalanche or generate 9.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Avalanche  vs.  Tether Gold

Avalanche

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Avalanche are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Avalanche exhibited solid returns over the last few months and may actually be approaching a breakup point.

Tether Gold

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tether Gold are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Tether Gold is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Avalanche and Tether Gold

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

The idea behind Avalanche and Tether Gold 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.