Correlation Between XT Token and Moonwell

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

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

Diversification Opportunities for XT Token and Moonwell

0.69

Correlation Coefficient

XT Token  Moonwell

Poor diversification

The 3 months correlation between XT Token and Moonwell is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding XT Token and Moonwell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moonwell and XT 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 XT Token are associated (or correlated) with Moonwell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moonwell has no effect on the direction of XT Token i.e., XT Token and Moonwell go up and down completely randomly.

Pair Corralation between XT Token and Moonwell

Assuming the 90 days horizon XT Token is expected to generate 3.41 times less return on investment than Moonwell. But when comparing it to its historical volatility, XT Token is 3.41 times less risky than Moonwell. It trades about 0.14 of its potential returns per unit of risk. Moonwell is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  2.63  in Moonwell on April 22, 2025 and sell it today you would earn a total of  1.51  from holding Moonwell or generate 57.41% return on investment over 90 days.

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

XT Token  vs.  Moonwell

XT Token

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in XT Token are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, XT Token exhibited solid returns over the last few months and may actually be approaching a breakup point.

Moonwell

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Moonwell are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Moonwell exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with XT Token and Moonwell

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

The idea behind XT Token and Moonwell 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.