Correlation Between 0x and Gatechain Token

Can any of the company-specific risk be diversified away by investing in both 0x and Gatechain Token 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 0x and Gatechain Token into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 0x and Gatechain Token, you can compare the effects of market volatilities on 0x and Gatechain Token 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 0x with a short position of Gatechain Token. Check out your portfolio center. Please also check ongoing floating volatility patterns of 0x and Gatechain Token.

Diversification Opportunities for 0x and Gatechain Token

0.73

Correlation Coefficient

0x  Gatechain Token

Poor diversification

The 3 months correlation between 0x and Gatechain is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding 0x and Gatechain Token in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gatechain Token and 0x 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 0x are associated (or correlated) with Gatechain Token. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gatechain Token has no effect on the direction of 0x i.e., 0x and Gatechain Token go up and down completely randomly.

Pair Corralation between 0x and Gatechain Token

Assuming the 90 days trading horizon 0x is expected to generate 2.18 times more return on investment than Gatechain Token. However, 0x is 2.18 times more volatile than Gatechain Token. It trades about 0.11 of its potential returns per unit of risk. Gatechain Token is currently generating about 0.15 per unit of risk. If you would invest  37.00  in 0x on January 20, 2024 and sell it today you would earn a total of  13.00  from holding 0x or generate 35.14% return on investment over 90 days.

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

0x  vs.  Gatechain Token

0x

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in 0x are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, 0x exhibited solid returns over the last few months and may actually be approaching a breakup point.

Gatechain Token

Risk-Adjusted Performance

10 of 100

OK

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

Pair Trading with 0x and Gatechain Token

The main advantage of trading using opposite 0x and Gatechain Token positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 0x position performs unexpectedly, Gatechain Token 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 Gatechain Token will offset losses from the drop in Gatechain Token's long position.

The idea behind 0x and Gatechain Token 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.