Correlation Between Compound Governance and Lisk
Can any of the company-specific risk be diversified away by investing in both Compound Governance and Lisk 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 Lisk 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 Lisk, you can compare the effects of market volatilities on Compound Governance and Lisk 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 Lisk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compound Governance and Lisk.
Diversification Opportunities for Compound Governance and Lisk
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Compound and Lisk is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Compound Governance Token and Lisk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lisk 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 Lisk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lisk has no effect on the direction of Compound Governance i.e., Compound Governance and Lisk go up and down completely randomly.
Pair Corralation between Compound Governance and Lisk
Assuming the 90 days trading horizon Compound Governance Token is expected to under-perform the Lisk. But the crypto coin apears to be less risky and, when comparing its historical volatility, Compound Governance Token is 1.43 times less risky than Lisk. The crypto coin trades about -0.22 of its potential returns per unit of risk. The Lisk is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 198.00 in Lisk on January 26, 2024 and sell it today you would lose (33.00) from holding Lisk or give up 16.67% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Compound Governance Token vs. Lisk
Performance |
Timeline |
Compound Governance Token |
Lisk |
Compound Governance and Lisk Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Compound Governance and Lisk
The main advantage of trading using opposite Compound Governance and Lisk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compound Governance position performs unexpectedly, Lisk 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 Lisk will offset losses from the drop in Lisk's 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Transaction History View history of all your transactions and understand their impact on performance | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |