Correlation Between KuCoin Token and Compound Governance

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

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

Diversification Opportunities for KuCoin Token and Compound Governance

0.77

Correlation Coefficient

KuCoin Token  Compound Governance

Poor diversification

The 3 months correlation between KuCoin and Compound is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding KuCoin Token and Compound Governance Token in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compound Governance Token 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 Compound Governance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compound Governance Token has no effect on the direction of KuCoin Token i.e., KuCoin Token and Compound Governance go up and down completely randomly.

Pair Corralation between KuCoin Token and Compound Governance

Assuming the 90 days trading horizon KuCoin Token is expected to generate 1.1 times more return on investment than Compound Governance. However, KuCoin Token is 1.1 times more volatile than Compound Governance Token. It trades about 0.1 of its potential returns per unit of risk. Compound Governance Token is currently generating about 0.05 per unit of risk. If you would invest  460.00  in KuCoin Token on January 19, 2024 and sell it today you would earn a total of  357.00  from holding KuCoin Token or generate 77.61% return on investment over 90 days.

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

KuCoin Token  vs.  Compound Governance Token

KuCoin Token

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KuCoin Token has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Crypto's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for KuCoin Token shareholders.

Compound Governance Token

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Compound Governance Token has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Compound Governance is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with KuCoin Token and Compound Governance

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

The idea behind KuCoin Token and Compound Governance 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.