Correlation Between Compound Governance and Cosmos
Can any of the company-specific risk be diversified away by investing in both Compound Governance and Cosmos 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 Compound Governance and Cosmos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compound Governance Token and Cosmos, you can compare the effects of market volatilities on Compound Governance and Cosmos 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 Compound Governance with a short position of Cosmos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compound Governance and Cosmos.
Diversification Opportunities for Compound Governance and Cosmos
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Compound and Cosmos is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Compound Governance Token and Cosmos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cosmos and Compound Governance 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 Compound Governance Token are associated (or correlated) with Cosmos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cosmos has no effect on the direction of Compound Governance i.e., Compound Governance and Cosmos go up and down completely randomly.
Pair Corralation between Compound Governance and Cosmos
Assuming the 90 days trading horizon Compound Governance Token is expected to generate 1.25 times more return on investment than Cosmos. However, Compound Governance is 1.25 times more volatile than Cosmos. It trades about 0.02 of its potential returns per unit of risk. Cosmos is currently generating about 0.0 per unit of risk. If you would invest 12,904 in Compound Governance Token on December 30, 2023 and sell it today you would lose (4,946) from holding Compound Governance Token or give up 38.33% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Compound Governance Token vs. Cosmos
Performance |
Timeline |
Compound Governance Token |
Cosmos |
Compound Governance and Cosmos Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Compound Governance and Cosmos
The main advantage of trading using opposite Compound Governance and Cosmos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compound Governance position performs unexpectedly, Cosmos 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 Cosmos will offset losses from the drop in Cosmos' long position.Compound Governance vs. Solana | Compound Governance vs. XRP | Compound Governance vs. Staked Ether | Compound Governance 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
Equity Valuation Check real value of public entities based on technical and fundamental data |