Correlation Between Gatechain Token and KAITO

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

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

Diversification Opportunities for Gatechain Token and KAITO

-0.25

Correlation Coefficient

Gatechain Token  KAITO

Very good diversification

The 3 months correlation between Gatechain and KAITO is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Gatechain Token and KAITO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KAITO and Gatechain 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 Gatechain Token are associated (or correlated) with KAITO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KAITO has no effect on the direction of Gatechain Token i.e., Gatechain Token and KAITO go up and down completely randomly.

Pair Corralation between Gatechain Token and KAITO

Assuming the 90 days horizon Gatechain Token is expected to under-perform the KAITO. But the crypto coin apears to be less risky and, when comparing its historical volatility, Gatechain Token is 1.67 times less risky than KAITO. The crypto coin trades about -0.07 of its potential returns per unit of risk. The KAITO is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  140.00  in KAITO on April 14, 2025 and sell it today you would earn a total of  14.00  from holding KAITO or generate 10.0% return on investment over 90 days.

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

Gatechain Token  vs.  KAITO

Gatechain Token

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gatechain 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 fundamental indicators remain rather sound which may send shares a bit higher in August 2025. The latest tumult may also be a sign of longer-term up-swing for Gatechain Token shareholders.

KAITO

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in KAITO are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, KAITO exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gatechain Token and KAITO

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

The idea behind Gatechain Token and KAITO 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.