Correlation Between CHP and Uquid Coin

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

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

Diversification Opportunities for CHP and Uquid Coin

0.61

Correlation Coefficient

CHP  Uquid Coin

Poor diversification

The 3 months correlation between CHP and Uquid is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding CHP and Uquid Coin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uquid Coin and CHP 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 CHP are associated (or correlated) with Uquid Coin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uquid Coin has no effect on the direction of CHP i.e., CHP and Uquid Coin go up and down completely randomly.

Pair Corralation between CHP and Uquid Coin

Assuming the 90 days trading horizon CHP is expected to under-perform the Uquid Coin. But the crypto coin apears to be less risky and, when comparing its historical volatility, CHP is 7.05 times less risky than Uquid Coin. The crypto coin trades about -0.15 of its potential returns per unit of risk. The Uquid Coin is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  987.00  in Uquid Coin on December 28, 2024 and sell it today you would lose (589.00) from holding Uquid Coin or give up 59.68% of portfolio value over 90 days.

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

CHP  vs.  Uquid Coin

CHP

Risk-Adjusted Performance

Very Weak

Over the last 90 days CHP 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 April 2025. The latest tumult may also be a sign of longer-term up-swing for CHP shareholders.

Uquid Coin

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Uquid Coin are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Uquid Coin exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CHP and Uquid Coin

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

The idea behind CHP and Uquid Coin 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.

Check out your portfolio center.

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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.