Correlation Between Dogecoin and Enjin Coin

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

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

Diversification Opportunities for Dogecoin and Enjin Coin

0.8

Correlation Coefficient

Dogecoin  Enjin Coin

Very poor diversification

The 3 months correlation between Dogecoin and Enjin is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Dogecoin and Enjin Coin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enjin Coin and Dogecoin 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 Dogecoin are associated (or correlated) with Enjin Coin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enjin Coin has no effect on the direction of Dogecoin i.e., Dogecoin and Enjin Coin go up and down completely randomly.

Pair Corralation between Dogecoin and Enjin Coin

Assuming the 90 days trading horizon Dogecoin is expected to under-perform the Enjin Coin. But the crypto coin apears to be less risky and, when comparing its historical volatility, Dogecoin is 1.34 times less risky than Enjin Coin. The crypto coin trades about -0.06 of its potential returns per unit of risk. The Enjin Coin is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  19.00  in Enjin Coin on November 19, 2024 and sell it today you would lose (6.00) from holding Enjin Coin or give up 31.58% of portfolio value over 90 days.

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

Dogecoin  vs.  Enjin Coin

Dogecoin

Risk-Adjusted Performance

Very Weak

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

Enjin Coin

Risk-Adjusted Performance

Very Weak

Over the last 90 days Enjin Coin 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 forward-looking indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for Enjin Coin shareholders.

Pair Trading with Dogecoin and Enjin Coin

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

The idea behind Dogecoin and Enjin 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.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.