Correlation Between WAL Token and AE

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

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

Diversification Opportunities for WAL Token and AE

0.7

Correlation Coefficient

WAL Token  AE

Poor diversification

The 3 months correlation between WAL and AE is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding WAL Token and AE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AE and WAL Token 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 WAL Token are associated (or correlated) with AE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AE has no effect on the direction of WAL Token i.e., WAL Token and AE go up and down completely randomly.

Pair Corralation between WAL Token and AE

Assuming the 90 days trading horizon WAL Token is expected to generate 0.77 times more return on investment than AE. However, WAL Token is 1.3 times less risky than AE. It trades about -0.01 of its potential returns per unit of risk. AE is currently generating about -0.16 per unit of risk. If you would invest  51.00  in WAL Token on April 22, 2025 and sell it today you would lose (7.00) from holding WAL Token or give up 13.73% of portfolio value over 90 days.

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

WAL Token  vs.  AE

WAL Token

Risk-Adjusted Performance

Very Weak

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

AE

Risk-Adjusted Performance

Very Weak

Over the last 90 days AE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in August 2025. The latest tumult may also be a sign of longer-term up-swing for AE shareholders.

Pair Trading with WAL Token and AE

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

The idea behind WAL Token and AE 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 Transaction History module to view history of all your transactions and understand their impact on performance.