Correlation Between FTX Token and Gatechain Token

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

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

Diversification Opportunities for FTX Token and Gatechain Token

-0.16

Correlation Coefficient

FTX Token  Gatechain Token

Good diversification

The 3 months correlation between FTX and Gatechain is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding FTX Token and Gatechain Token in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gatechain Token and FTX Token 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 FTX Token are associated (or correlated) with Gatechain Token. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gatechain Token has no effect on the direction of FTX Token i.e., FTX Token and Gatechain Token go up and down completely randomly.

Pair Corralation between FTX Token and Gatechain Token

Assuming the 90 days trading horizon FTX Token is expected to under-perform the Gatechain Token. In addition to that, FTX Token is 1.13 times more volatile than Gatechain Token. It trades about -0.12 of its total potential returns per unit of risk. Gatechain Token is currently generating about 0.19 per unit of volatility. If you would invest  531.00  in Gatechain Token on February 6, 2024 and sell it today you would earn a total of  283.00  from holding Gatechain Token or generate 53.3% return on investment over 90 days.

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

FTX Token  vs.  Gatechain Token

FTX Token

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FTX Token are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, FTX Token may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Gatechain Token

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gatechain Token are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, Gatechain Token exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FTX Token and Gatechain Token

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

The idea behind FTX Token and Gatechain Token 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.