Correlation Between Nervos Network and JAR
Can any of the company-specific risk be diversified away by investing in both Nervos Network and JAR 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 Nervos Network and JAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nervos Network and JAR, you can compare the effects of market volatilities on Nervos Network and JAR 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 Nervos Network with a short position of JAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nervos Network and JAR.
Diversification Opportunities for Nervos Network and JAR
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nervos and JAR is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Nervos Network and JAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JAR and Nervos 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 Nervos Network are associated (or correlated) with JAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JAR has no effect on the direction of Nervos Network i.e., Nervos Network and JAR go up and down completely randomly.
Pair Corralation between Nervos Network and JAR
Assuming the 90 days trading horizon Nervos Network is expected to generate 3.16 times more return on investment than JAR. However, Nervos Network is 3.16 times more volatile than JAR. It trades about 0.01 of its potential returns per unit of risk. JAR is currently generating about -0.26 per unit of risk. If you would invest 1.91 in Nervos Network on January 29, 2024 and sell it today you would lose (0.22) from holding Nervos Network or give up 11.52% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Nervos Network vs. JAR
Performance |
Timeline |
Nervos Network |
JAR |
Nervos Network and JAR Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nervos Network and JAR
The main advantage of trading using opposite Nervos Network and JAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nervos Network position performs unexpectedly, JAR 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 JAR will offset losses from the drop in JAR's long position.Nervos Network vs. Bitcoin | Nervos Network vs. Dogecoin | Nervos Network vs. Bitcoin Cash | Nervos Network vs. Litecoin |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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