Correlation Between KuCoin Token and ME

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

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

Diversification Opportunities for KuCoin Token and ME

0.42

Correlation Coefficient

KuCoin Token  ME

Very weak diversification

The 3 months correlation between KuCoin and ME is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding KuCoin Token and ME in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ME 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 ME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ME has no effect on the direction of KuCoin Token i.e., KuCoin Token and ME go up and down completely randomly.

Pair Corralation between KuCoin Token and ME

Assuming the 90 days trading horizon KuCoin Token is expected to generate 0.92 times more return on investment than ME. However, KuCoin Token is 1.09 times less risky than ME. It trades about 0.1 of its potential returns per unit of risk. ME is currently generating about -0.02 per unit of risk. If you would invest  596.00  in KuCoin Token on February 6, 2024 and sell it today you would earn a total of  430.00  from holding KuCoin Token or generate 72.15% return on investment over 90 days.

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

KuCoin Token  vs.  ME

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 June 2024.

ME

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ME are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, ME exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KuCoin Token and ME

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

The idea behind KuCoin Token and ME 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.