Correlation Between Uniswap Protocol and Layer3
Can any of the company-specific risk be diversified away by investing in both Uniswap Protocol and Layer3 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 Uniswap Protocol and Layer3 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uniswap Protocol Token and Layer3, you can compare the effects of market volatilities on Uniswap Protocol and Layer3 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 Uniswap Protocol with a short position of Layer3. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uniswap Protocol and Layer3.
Diversification Opportunities for Uniswap Protocol and Layer3
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Uniswap and Layer3 is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Uniswap Protocol Token and Layer3 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Layer3 and Uniswap Protocol 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 Uniswap Protocol Token are associated (or correlated) with Layer3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Layer3 has no effect on the direction of Uniswap Protocol i.e., Uniswap Protocol and Layer3 go up and down completely randomly.
Pair Corralation between Uniswap Protocol and Layer3
Assuming the 90 days trading horizon Uniswap Protocol Token is expected to generate 0.74 times more return on investment than Layer3. However, Uniswap Protocol Token is 1.35 times less risky than Layer3. It trades about 0.15 of its potential returns per unit of risk. Layer3 is currently generating about 0.0 per unit of risk. If you would invest 581.00 in Uniswap Protocol Token on April 23, 2025 and sell it today you would earn a total of 437.00 from holding Uniswap Protocol Token or generate 75.22% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Uniswap Protocol Token vs. Layer3
Performance |
Timeline |
Uniswap Protocol Token |
Layer3 |
Uniswap Protocol and Layer3 Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Uniswap Protocol and Layer3
The main advantage of trading using opposite Uniswap Protocol and Layer3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uniswap Protocol position performs unexpectedly, Layer3 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 Layer3 will offset losses from the drop in Layer3's long position.Uniswap Protocol vs. Staked Ether | Uniswap Protocol vs. EigenLayer | Uniswap Protocol vs. EOSDAC | Uniswap Protocol vs. BLZ |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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