Correlation Between Chainlink and Dash

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

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

Diversification Opportunities for Chainlink and Dash

0.57

Correlation Coefficient

Chainlink  Dash

Very weak diversification

The 3 months correlation between Chainlink and Dash is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Chainlink and Dash in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dash and Chainlink 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 Chainlink are associated (or correlated) with Dash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dash has no effect on the direction of Chainlink i.e., Chainlink and Dash go up and down completely randomly.

Pair Corralation between Chainlink and Dash

Assuming the 90 days trading horizon Chainlink is expected to under-perform the Dash. But the crypto coin apears to be less risky and, when comparing its historical volatility, Chainlink is 1.02 times less risky than Dash. The crypto coin trades about -0.3 of its potential returns per unit of risk. The Dash is currently generating about -0.2 of returns per unit of risk over similar time horizon. If you would invest  3,582  in Dash on January 19, 2024 and sell it today you would lose (784.00) from holding Dash or give up 21.89% of portfolio value over 90 days.

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

Chainlink  vs.  Dash

Chainlink

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chainlink has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Crypto's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for Chainlink shareholders.

Dash

Risk-Adjusted Performance

1 of 100

Weak

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

Pair Trading with Chainlink and Dash

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

The idea behind Chainlink and Dash 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.