Correlation Between Cardano and Ginnie Mae

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

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

Diversification Opportunities for Cardano and Ginnie Mae

-0.74

Correlation Coefficient

Cardano  Ginnie Mae

Pay attention - limited upside

The 3 months correlation between Cardano and Ginnie is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Cardano and Ginnie Mae Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ginnie Mae Fund and Cardano 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 Cardano are associated (or correlated) with Ginnie Mae. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ginnie Mae Fund has no effect on the direction of Cardano i.e., Cardano and Ginnie Mae go up and down completely randomly.

Pair Corralation between Cardano and Ginnie Mae

Assuming the 90 days trading horizon Cardano is expected to under-perform the Ginnie Mae. In addition to that, Cardano is 25.25 times more volatile than Ginnie Mae Fund. It trades about -0.02 of its total potential returns per unit of risk. Ginnie Mae Fund is currently generating about 0.16 per unit of volatility. If you would invest  867.00  in Ginnie Mae Fund on December 22, 2024 and sell it today you would earn a total of  25.00  from holding Ginnie Mae Fund or generate 2.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	93.75%
Values	Daily Returns

Cardano  vs.  Ginnie Mae Fund

Cardano

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cardano has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Crypto's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for Cardano shareholders.

Ginnie Mae Fund

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ginnie Mae Fund are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Ginnie Mae is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cardano and Ginnie Mae

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

The idea behind Cardano and Ginnie Mae Fund 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.