Correlation Between Morpho and Kaspa

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

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

Diversification Opportunities for Morpho and Kaspa

0.4

Correlation Coefficient

Morpho  Kaspa

Very weak diversification

The 3 months correlation between Morpho and Kaspa is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Morpho and Kaspa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaspa and Morpho 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 Morpho are associated (or correlated) with Kaspa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaspa has no effect on the direction of Morpho i.e., Morpho and Kaspa go up and down completely randomly.

Pair Corralation between Morpho and Kaspa

Assuming the 90 days trading horizon Morpho is expected to generate 1.5 times more return on investment than Kaspa. However, Morpho is 1.5 times more volatile than Kaspa. It trades about 0.18 of its potential returns per unit of risk. Kaspa is currently generating about 0.0 per unit of risk. If you would invest  101.00  in Morpho on April 20, 2025 and sell it today you would earn a total of  103.00  from holding Morpho or generate 101.98% return on investment over 90 days.

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

Morpho  vs.  Kaspa

Morpho

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Morpho are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Morpho sustained solid returns over the last few months and may actually be approaching a breakup point.

Kaspa

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kaspa has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Kaspa is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Morpho and Kaspa

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

The idea behind Morpho and Kaspa 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.