Correlation Between KuCoin Token and REP

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

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

Diversification Opportunities for KuCoin Token and REP

0.73

Correlation Coefficient

KuCoin Token  REP

Poor diversification

The 3 months correlation between KuCoin and REP is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding KuCoin Token and REP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REP 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 REP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REP has no effect on the direction of KuCoin Token i.e., KuCoin Token and REP go up and down completely randomly.

Pair Corralation between KuCoin Token and REP

Assuming the 90 days trading horizon KuCoin Token is expected to under-perform the REP. But the crypto coin apears to be less risky and, when comparing its historical volatility, KuCoin Token is 1.33 times less risky than REP. The crypto coin trades about -0.22 of its potential returns per unit of risk. The REP is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest  124.00  in REP on January 24, 2024 and sell it today you would lose (31.00) from holding REP or give up 25.0% of portfolio value over 90 days.

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

KuCoin Token  vs.  REP

KuCoin Token

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in KuCoin Token are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, KuCoin Token is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

REP

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in REP are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, REP exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KuCoin Token and REP

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

The idea behind KuCoin Token and REP 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.