Correlation Between FTX Token and Origin Protocol

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

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

Diversification Opportunities for FTX Token and Origin Protocol

-0.04

Correlation Coefficient

FTX Token  Origin Protocol

Good diversification

The 3 months correlation between FTX and Origin is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding FTX Token and Origin Protocol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Protocol 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 Origin Protocol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Origin Protocol has no effect on the direction of FTX Token i.e., FTX Token and Origin Protocol go up and down completely randomly.

Pair Corralation between FTX Token and Origin Protocol

Assuming the 90 days trading horizon FTX Token is expected to under-perform the Origin Protocol. But the crypto coin apears to be less risky and, when comparing its historical volatility, FTX Token is 1.07 times less risky than Origin Protocol. The crypto coin trades about -0.23 of its potential returns per unit of risk. The Origin Protocol is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest  19.00  in Origin Protocol on January 17, 2024 and sell it today you would lose (4.00) from holding Origin Protocol or give up 21.05% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

FTX Token  vs.  Origin Protocol

FTX Token

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FTX Token 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 May 2024. The latest tumult may also be a sign of longer-term up-swing for FTX Token shareholders.

Origin Protocol

Risk-Adjusted Performance

1 of 100

Weak

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

Pair Trading with FTX Token and Origin Protocol

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

The idea behind FTX Token and Origin Protocol 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.