Correlation Between Dusk Network and GRIN

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

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

Diversification Opportunities for Dusk Network and GRIN

-0.26

Correlation Coefficient

Dusk Network  GRIN

Very good diversification

The 3 months correlation between Dusk and GRIN is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Dusk Network and GRIN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRIN and Dusk 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 Dusk Network are associated (or correlated) with GRIN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRIN has no effect on the direction of Dusk Network i.e., Dusk Network and GRIN go up and down completely randomly.

Pair Corralation between Dusk Network and GRIN

Assuming the 90 days trading horizon Dusk Network is expected to under-perform the GRIN. In addition to that, Dusk Network is 1.48 times more volatile than GRIN. It trades about -0.17 of its total potential returns per unit of risk. GRIN is currently generating about -0.19 per unit of volatility. If you would invest  6.45  in GRIN on February 7, 2024 and sell it today you would lose (1.31) from holding GRIN or give up 20.31% of portfolio value over 90 days.

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

Dusk Network  vs.  GRIN

Dusk Network

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Dusk Network are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Dusk Network exhibited solid returns over the last few months and may actually be approaching a breakup point.

GRIN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GRIN has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's basic indicators remain rather sound which may send shares a bit higher in June 2024. The latest tumult may also be a sign of longer-term up-swing for GRIN shareholders.

Pair Trading with Dusk Network and GRIN

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

The idea behind Dusk Network and GRIN 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .