Correlation Between KuCoin Token and NEM

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Can any of the company-specific risk be diversified away by investing in both KuCoin Token and NEM 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 NEM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KuCoin Token and NEM, you can compare the effects of market volatilities on KuCoin Token and NEM 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 NEM. Check out your portfolio center. Please also check ongoing floating volatility patterns of KuCoin Token and NEM.

Diversification Opportunities for KuCoin Token and NEM

0.87
  Correlation Coefficient

Very poor diversification

The 3 months correlation between KuCoin and NEM is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding KuCoin Token and NEM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEM 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 NEM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEM has no effect on the direction of KuCoin Token i.e., KuCoin Token and NEM go up and down completely randomly.

Pair Corralation between KuCoin Token and NEM

Assuming the 90 days trading horizon KuCoin Token is expected to generate 1.03 times more return on investment than NEM. However, KuCoin Token is 1.03 times more volatile than NEM. It trades about 0.16 of its potential returns per unit of risk. NEM is currently generating about 0.12 per unit of risk. If you would invest  456.00  in KuCoin Token on December 29, 2023 and sell it today you would earn a total of  734.00  from holding KuCoin Token or generate 160.96% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

KuCoin Token  vs.  NEM

 Performance 
       Timeline  
KuCoin Token 

Risk-Adjusted Performance

5 of 100

 
Low
 
High
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in KuCoin Token are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, KuCoin Token exhibited solid returns over the last few months and may actually be approaching a breakup point.
NEM 

Risk-Adjusted Performance

7 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in NEM are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady primary indicators, NEM exhibited solid returns over the last few months and may actually be approaching a breakup point.

KuCoin Token and NEM Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with KuCoin Token and NEM

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

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