Correlation Between LEO Token and OCEAN

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

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

Diversification Opportunities for LEO Token and OCEAN

-0.45

Correlation Coefficient

LEO Token  OCEAN

Very good diversification

The 3 months correlation between LEO and OCEAN is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding LEO Token and OCEAN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OCEAN 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 OCEAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OCEAN has no effect on the direction of LEO Token i.e., LEO Token and OCEAN go up and down completely randomly.

Pair Corralation between LEO Token and OCEAN

Assuming the 90 days trading horizon LEO Token is expected to under-perform the OCEAN. But the crypto coin apears to be less risky and, when comparing its historical volatility, LEO Token is 2.82 times less risky than OCEAN. The crypto coin trades about -0.01 of its potential returns per unit of risk. The OCEAN is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  31.00  in OCEAN on April 23, 2025 and sell it today you would earn a total of  5.00  from holding OCEAN or generate 16.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

LEO Token  vs.  OCEAN

LEO Token

Risk-Adjusted Performance

Very Weak

Over the last 90 days LEO Token has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

OCEAN

Risk-Adjusted Performance

Insignificant

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

Pair Trading with LEO Token and OCEAN

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

The idea behind LEO Token and OCEAN 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.