Correlation Between Compound Governance and OKB
Can any of the company-specific risk be diversified away by investing in both Compound Governance and OKB 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 OKB 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 OKB, you can compare the effects of market volatilities on Compound Governance and OKB 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 OKB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compound Governance and OKB.
Diversification Opportunities for Compound Governance and OKB
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Compound and OKB is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Compound Governance Token and OKB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OKB 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 OKB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OKB has no effect on the direction of Compound Governance i.e., Compound Governance and OKB go up and down completely randomly.
Pair Corralation between Compound Governance and OKB
Assuming the 90 days trading horizon Compound Governance is expected to generate 3.2 times less return on investment than OKB. In addition to that, Compound Governance is 1.49 times more volatile than OKB. It trades about 0.01 of its total potential returns per unit of risk. OKB is currently generating about 0.07 per unit of volatility. If you would invest 1,808 in OKB on January 24, 2024 and sell it today you would earn a total of 3,683 from holding OKB or generate 203.71% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Compound Governance Token vs. OKB
Performance |
Timeline |
Compound Governance Token |
OKB |
Compound Governance and OKB Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Compound Governance and OKB
The main advantage of trading using opposite Compound Governance and OKB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compound Governance position performs unexpectedly, OKB 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 OKB will offset losses from the drop in OKB's long position.Compound Governance vs. Solana | Compound Governance vs. XRP | Compound Governance vs. The Open Network | Compound Governance vs. Staked Ether |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
AI Investment Finder Use AI to screen and filter profitable investment opportunities | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Stocks Directory Find actively traded stocks across global markets | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
CEOs Directory Screen CEOs from public companies around the world |