Correlation Between NEO and Tether

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

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

Diversification Opportunities for NEO and Tether

0.0

Correlation Coefficient

NEO  Tether

Pay attention - limited upside

The 3 months correlation between NEO and Tether is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NEO and Tether in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tether and NEO 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 NEO are associated (or correlated) with Tether. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tether has no effect on the direction of NEO i.e., NEO and Tether go up and down completely randomly.

Pair Corralation between NEO and Tether

If you would invest  1,621  in NEO on January 26, 2024 and sell it today you would earn a total of  185.00  from holding NEO or generate 11.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.81%
Values	Daily Returns

NEO  vs.  Tether

NEO

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NEO are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, NEO exhibited solid returns over the last few months and may actually be approaching a breakup point.

Tether

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with NEO and Tether

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

The idea behind NEO and Tether 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 CEOs Directory module to screen CEOs from public companies around the world.