Correlation Between Dai and Sandbox

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

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

Diversification Opportunities for Dai and Sandbox

0.0

Correlation Coefficient

Dai  Sandbox

Pay attention - limited upside

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

Pair Corralation between Dai and Sandbox

If you would invest  100.00  in Dai on December 30, 2024 and sell it today you would earn a total of  0.00  from holding Dai or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Dai  vs.  The Sandbox

Dai

Risk-Adjusted Performance

Very Weak

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

Sandbox

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Sandbox 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 fundamental 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 The Sandbox shareholders.

Pair Trading with Dai and Sandbox

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

The idea behind Dai and The Sandbox 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.