Correlation Between FileCoin and Morpho

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

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

Diversification Opportunities for FileCoin and Morpho

0.36

Correlation Coefficient

FileCoin  Morpho

Weak diversification

The 3 months correlation between FileCoin and Morpho is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding FileCoin and Morpho in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morpho and FileCoin 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 FileCoin 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 FileCoin i.e., FileCoin and Morpho go up and down completely randomly.

Pair Corralation between FileCoin and Morpho

Assuming the 90 days trading horizon FileCoin is expected to generate 12.26 times less return on investment than Morpho. But when comparing it to its historical volatility, FileCoin is 1.82 times less risky than Morpho. It trades about 0.02 of its potential returns per unit of risk. Morpho is currently generating about 0.14 of returns per unit of risk over similar time horizon. 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	Very Weak
Accuracy	100.0%
Values	Daily Returns

FileCoin  vs.  Morpho

FileCoin

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FileCoin are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound essential indicators, FileCoin is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

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 FileCoin and Morpho

The main advantage of trading using opposite FileCoin and Morpho positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FileCoin 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 FileCoin 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.