Correlation Between Near and Tether Gold

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

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

Diversification Opportunities for Near and Tether Gold

-0.44

Correlation Coefficient

Near  Tether Gold

Very good diversification

The 3 months correlation between Near and Tether is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Near and Tether Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tether Gold and Near 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 Near are associated (or correlated) with Tether Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tether Gold has no effect on the direction of Near i.e., Near and Tether Gold go up and down completely randomly.

Pair Corralation between Near and Tether Gold

Assuming the 90 days trading horizon Near is expected to generate 4.83 times more return on investment than Tether Gold. However, Near is 4.83 times more volatile than Tether Gold. It trades about 0.07 of its potential returns per unit of risk. Tether Gold is currently generating about 0.01 per unit of risk. If you would invest  254.00  in Near on April 23, 2025 and sell it today you would earn a total of  38.00  from holding Near or generate 14.96% return on investment over 90 days.

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

Near  vs.  Tether Gold

Near

Risk-Adjusted Performance

Modest

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

Tether Gold

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Near and Tether Gold

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

The idea behind Near and Tether Gold 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.