Correlation Between Curve DAO and MWAT

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

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

Diversification Opportunities for Curve DAO and MWAT

0.0

Correlation Coefficient

Curve DAO  MWAT

Pay attention - limited upside

The 3 months correlation between Curve and MWAT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Curve DAO Token and MWAT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MWAT and Curve DAO 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 Curve DAO Token are associated (or correlated) with MWAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MWAT has no effect on the direction of Curve DAO i.e., Curve DAO and MWAT go up and down completely randomly.

Pair Corralation between Curve DAO and MWAT

If you would invest  50.00  in Curve DAO Token on November 27, 2024 and sell it today you would lose (5.00) from holding Curve DAO Token or give up 10.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Curve DAO Token  vs.  MWAT

Curve DAO Token

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Curve DAO Token are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Curve DAO exhibited solid returns over the last few months and may actually be approaching a breakup point.

MWAT

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Curve DAO and MWAT

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

The idea behind Curve DAO Token and MWAT 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.