Correlation Between Ontology and KuCoin Token

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

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

Diversification Opportunities for Ontology and KuCoin Token

0.61

Correlation Coefficient

Ontology  KuCoin Token

Poor diversification

The 3 months correlation between Ontology and KuCoin is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Ontology and KuCoin Token in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KuCoin Token and Ontology 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 Ontology are associated (or correlated) with KuCoin Token. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KuCoin Token has no effect on the direction of Ontology i.e., Ontology and KuCoin Token go up and down completely randomly.

Pair Corralation between Ontology and KuCoin Token

Assuming the 90 days trading horizon Ontology is expected to generate 20.72 times less return on investment than KuCoin Token. But when comparing it to its historical volatility, Ontology is 12.0 times less risky than KuCoin Token. It trades about 0.03 of its potential returns per unit of risk. KuCoin Token is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,790  in KuCoin Token on January 20, 2024 and sell it today you would lose (933.00) from holding KuCoin Token or give up 52.12% of portfolio value over 90 days.

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

Ontology  vs.  KuCoin Token

Ontology

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ontology are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Ontology exhibited solid returns over the last few months and may actually be approaching a breakup point.

KuCoin Token

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Ontology and KuCoin Token

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

The idea behind Ontology and KuCoin Token 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 Anywhere module to track or share privately all of your investments from the convenience of any device.