Correlation Between KuCoin Token and Cardano

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

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

Diversification Opportunities for KuCoin Token and Cardano

0.86

Correlation Coefficient

KuCoin Token  Cardano

Very poor diversification

The 3 months correlation between KuCoin and Cardano is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding KuCoin Token and Cardano in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardano and KuCoin 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 KuCoin Token are associated (or correlated) with Cardano. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardano has no effect on the direction of KuCoin Token i.e., KuCoin Token and Cardano go up and down completely randomly.

Pair Corralation between KuCoin Token and Cardano

Assuming the 90 days trading horizon KuCoin Token is expected to generate 12.6 times more return on investment than Cardano. However, KuCoin Token is 12.6 times more volatile than Cardano. It trades about 0.05 of its potential returns per unit of risk. Cardano is currently generating about 0.01 per unit of risk. If you would invest  1,672  in KuCoin Token on January 26, 2024 and sell it today you would lose (673.00) from holding KuCoin Token or give up 40.25% of portfolio value over 90 days.

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

KuCoin Token  vs.  Cardano

KuCoin Token

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in KuCoin Token are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, KuCoin Token may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Cardano

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cardano are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Cardano may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with KuCoin Token and Cardano

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

The idea behind KuCoin Token and Cardano 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.