Correlation Between Theta Fuel and Cardano

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

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

Diversification Opportunities for Theta Fuel and Cardano

0.91

Correlation Coefficient

Theta Fuel  Cardano

Almost no diversification

The 3 months correlation between Theta and Cardano is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Theta Fuel and Cardano in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardano and Theta Fuel 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 Theta Fuel are associated (or correlated) with Cardano. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardano has no effect on the direction of Theta Fuel i.e., Theta Fuel and Cardano go up and down completely randomly.

Pair Corralation between Theta Fuel and Cardano

Assuming the 90 days trading horizon Theta Fuel is expected to generate 2.49 times less return on investment than Cardano. But when comparing it to its historical volatility, Theta Fuel is 1.27 times less risky than Cardano. It trades about 0.04 of its potential returns per unit of risk. Cardano is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  72.00  in Cardano on April 23, 2025 and sell it today you would earn a total of  11.00  from holding Cardano or generate 15.28% return on investment over 90 days.

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

Theta Fuel  vs.  Cardano

Theta Fuel

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Theta Fuel are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Theta Fuel may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Cardano

Risk-Adjusted Performance

Modest

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

Pair Trading with Theta Fuel and Cardano

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

The idea behind Theta Fuel and Cardano 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.