Correlation Between XCAD Network and Tezos

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

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

Diversification Opportunities for XCAD Network and Tezos

0.72

Correlation Coefficient

XCAD Network  Tezos

Poor diversification

The 3 months correlation between XCAD and Tezos is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding XCAD Network and Tezos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tezos and XCAD 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 XCAD Network are associated (or correlated) with Tezos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tezos has no effect on the direction of XCAD Network i.e., XCAD Network and Tezos go up and down completely randomly.

Pair Corralation between XCAD Network and Tezos

Assuming the 90 days trading horizon XCAD Network is expected to under-perform the Tezos. But the crypto coin apears to be less risky and, when comparing its historical volatility, XCAD Network is 1.03 times less risky than Tezos. The crypto coin trades about -0.44 of its potential returns per unit of risk. The Tezos is currently generating about -0.26 of returns per unit of risk over similar time horizon. If you would invest  127.00  in Tezos on February 3, 2024 and sell it today you would lose (33.00) from holding Tezos or give up 25.98% of portfolio value over 90 days.

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

XCAD Network  vs.  Tezos

XCAD Network

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days XCAD Network 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 basic indicators remain rather sound which may send shares a bit higher in June 2024. The latest tumult may also be a sign of longer-term up-swing for XCAD Network shareholders.

Tezos

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with XCAD Network and Tezos

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

The idea behind XCAD Network and Tezos 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.