Correlation Between FTX Token and Tezos

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Can any of the company-specific risk be diversified away by investing in both FTX Token and Tezos 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 Tezos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FTX Token and Tezos, you can compare the effects of market volatilities on FTX Token and Tezos 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 Tezos. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTX Token and Tezos.

Diversification Opportunities for FTX Token and Tezos

-0.12
  Correlation Coefficient

Good diversification

The 3 months correlation between FTX and Tezos is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding FTX Token and Tezos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tezos 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 Tezos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tezos has no effect on the direction of FTX Token i.e., FTX Token and Tezos go up and down completely randomly.

Pair Corralation between FTX Token and Tezos

Assuming the 90 days trading horizon FTX Token is expected to generate 3.08 times more return on investment than Tezos. However, FTX Token is 3.08 times more volatile than Tezos. It trades about 0.02 of its potential returns per unit of risk. Tezos is currently generating about 0.02 per unit of risk. If you would invest  2,736  in FTX Token on December 29, 2023 and sell it today you would lose (2,528) from holding FTX Token or give up 92.4% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

FTX Token  vs.  Tezos

 Performance 
       Timeline  
FTX Token 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
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 April 2024. The latest tumult may also be a sign of longer-term up-swing for FTX Token shareholders.
Tezos 

Risk-Adjusted Performance

8 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Tezos are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Tezos exhibited solid returns over the last few months and may actually be approaching a breakup point.

FTX Token and Tezos Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with FTX Token and Tezos

The main advantage of trading using opposite FTX Token and Tezos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTX Token position performs unexpectedly, Tezos 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 Tezos will offset losses from the drop in Tezos' long position.
The idea behind FTX Token and Tezos 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.
Check out your portfolio center.
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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