Correlation Between EOSDAC and BNT

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

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

Diversification Opportunities for EOSDAC and BNT

0.69

Correlation Coefficient

EOSDAC  BNT

Poor diversification

The 3 months correlation between EOSDAC and BNT is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding EOSDAC and BNT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNT and EOSDAC 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 EOSDAC are associated (or correlated) with BNT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BNT has no effect on the direction of EOSDAC i.e., EOSDAC and BNT go up and down completely randomly.

Pair Corralation between EOSDAC and BNT

Assuming the 90 days trading horizon EOSDAC is expected to under-perform the BNT. In addition to that, EOSDAC is 1.58 times more volatile than BNT. It trades about -0.05 of its total potential returns per unit of risk. BNT is currently generating about -0.04 per unit of volatility. If you would invest  55.00  in BNT on February 3, 2025 and sell it today you would lose (9.00) from holding BNT or give up 16.36% of portfolio value over 90 days.

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

EOSDAC  vs.  BNT

EOSDAC

Risk-Adjusted Performance

Very Weak

Over the last 90 days EOSDAC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Crypto's basic indicators remain somewhat strong which may send shares a bit higher in June 2025. The current disturbance may also be a sign of long term up-swing for EOSDAC investors.

BNT

Risk-Adjusted Performance

Very Weak

Over the last 90 days BNT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Crypto's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for BNT shareholders.

Pair Trading with EOSDAC and BNT

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

The idea behind EOSDAC and BNT 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 Transaction History module to view history of all your transactions and understand their impact on performance.