Correlation Between Ontology and Status Network

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

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

Diversification Opportunities for Ontology and Status Network

0.83

Correlation Coefficient

Ontology  Status Network

Very poor diversification

The 3 months correlation between Ontology and Status is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Ontology and Status Network Token in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Status Network 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 Status Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Status Network Token has no effect on the direction of Ontology i.e., Ontology and Status Network go up and down completely randomly.

Pair Corralation between Ontology and Status Network

Assuming the 90 days trading horizon Ontology is expected to generate 1.51 times less return on investment than Status Network. But when comparing it to its historical volatility, Ontology is 1.33 times less risky than Status Network. It trades about 0.05 of its potential returns per unit of risk. Status Network Token is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  2.30  in Status Network Token on January 19, 2024 and sell it today you would earn a total of  1.37  from holding Status Network Token or generate 59.57% return on investment over 90 days.

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

Ontology  vs.  Status Network Token

Ontology

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ontology are ranked lower than 6 (%) 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.

Status Network Token

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Status Network Token has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Status Network 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 Status Network

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

The idea behind Ontology and Status Network 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.