Correlation Between Convex Finance and Morpho

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

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

Diversification Opportunities for Convex Finance and Morpho

0.81

Correlation Coefficient

Convex Finance  Morpho

Very poor diversification

The 3 months correlation between Convex and Morpho is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Convex Finance and Morpho in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morpho and Convex Finance 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 Convex Finance are associated (or correlated) with Morpho. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morpho has no effect on the direction of Convex Finance i.e., Convex Finance and Morpho go up and down completely randomly.

Pair Corralation between Convex Finance and Morpho

Assuming the 90 days trading horizon Convex Finance is expected to generate 1.11 times less return on investment than Morpho. In addition to that, Convex Finance is 1.02 times more volatile than Morpho. It trades about 0.13 of its total potential returns per unit of risk. Morpho is currently generating about 0.14 per unit of volatility. If you would invest  118.00  in Morpho on April 22, 2025 and sell it today you would earn a total of  82.00  from holding Morpho or generate 69.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Convex Finance  vs.  Morpho

Convex Finance

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Convex Finance are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Convex Finance exhibited solid returns over the last few months and may actually be approaching a breakup point.

Morpho

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Morpho are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Morpho sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Convex Finance and Morpho

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

The idea behind Convex Finance and Morpho 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.

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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.