Correlation Between Pi Network and KSM

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

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

Diversification Opportunities for Pi Network and KSM

0.81

Correlation Coefficient

Pi Network  KSM

Very poor diversification

The 3 months correlation between Pi Network and KSM is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Pi Network and KSM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KSM and Pi Network 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 Pi Network are associated (or correlated) with KSM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KSM has no effect on the direction of Pi Network i.e., Pi Network and KSM go up and down completely randomly.

Pair Corralation between Pi Network and KSM

Assuming the 90 days horizon Pi Network is expected to under-perform the KSM. In addition to that, Pi Network is 1.9 times more volatile than KSM. It trades about -0.01 of its total potential returns per unit of risk. KSM is currently generating about 0.02 per unit of volatility. If you would invest  1,633  in KSM on April 24, 2025 and sell it today you would lose (59.00) from holding KSM or give up 3.61% of portfolio value over 90 days.

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

Pi Network  vs.  KSM

Pi Network

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pi Network has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Crypto's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for Pi Network shareholders.

KSM

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in KSM are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, KSM is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Pi Network and KSM

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

The idea behind Pi Network and KSM 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.