Correlation Between Cardano and EMLD Old

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

By analyzing existing cross correlation between Cardano and EMLD Old, you can compare the effects of market volatilities on Cardano and EMLD Old 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 EMLD Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardano and EMLD Old.

Diversification Opportunities for Cardano and EMLD Old

0.71

Correlation Coefficient

Cardano  EMLD Old

Poor diversification

The 3 months correlation between Cardano and EMLD is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Cardano and EMLD Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMLD Old 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 EMLD Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMLD Old has no effect on the direction of Cardano i.e., Cardano and EMLD Old go up and down completely randomly.

Pair Corralation between Cardano and EMLD Old

If you would invest  92.00  in Cardano on October 25, 2024 and sell it today you would earn a total of  6.00  from holding Cardano or generate 6.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	4.76%
Values	Daily Returns

Cardano  vs.  EMLD Old

Cardano

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cardano are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Cardano exhibited solid returns over the last few months and may actually be approaching a breakup point.

EMLD Old

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Cardano and EMLD Old

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

The idea behind Cardano and EMLD Old 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.