Correlation Between LEO Token and Hive

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

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

Diversification Opportunities for LEO Token and Hive

0.07

Correlation Coefficient

LEO Token  Hive

Significant diversification

The 3 months correlation between LEO and Hive is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding LEO Token and Hive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hive and LEO 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 LEO Token are associated (or correlated) with Hive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hive has no effect on the direction of LEO Token i.e., LEO Token and Hive go up and down completely randomly.

Pair Corralation between LEO Token and Hive

Assuming the 90 days trading horizon LEO Token is expected to generate 0.28 times more return on investment than Hive. However, LEO Token is 3.58 times less risky than Hive. It trades about 0.04 of its potential returns per unit of risk. Hive is currently generating about -0.02 per unit of risk. If you would invest  582.00  in LEO Token on January 29, 2024 and sell it today you would earn a total of  4.00  from holding LEO Token or generate 0.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	4.98%
Values	Daily Returns

LEO Token  vs.  Hive

LEO Token

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in LEO Token are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, LEO Token is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Hive

Risk-Adjusted Performance

2 of 100

Weak

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

Pair Trading with LEO Token and Hive

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

The idea behind LEO Token and Hive 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.