Correlation Between EOS and ApeCoin

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

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

Diversification Opportunities for EOS and ApeCoin

0.91

Correlation Coefficient

EOS  ApeCoin

Almost no diversification

The 3 months correlation between EOS and ApeCoin is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding EOS and ApeCoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ApeCoin and EOS 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 EOS are associated (or correlated) with ApeCoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ApeCoin has no effect on the direction of EOS i.e., EOS and ApeCoin go up and down completely randomly.

Pair Corralation between EOS and ApeCoin

Assuming the 90 days trading horizon EOS is expected to generate 0.88 times more return on investment than ApeCoin. However, EOS is 1.14 times less risky than ApeCoin. It trades about -0.07 of its potential returns per unit of risk. ApeCoin is currently generating about -0.2 per unit of risk. If you would invest  77.00  in EOS on December 29, 2024 and sell it today you would lose (23.00) from holding EOS or give up 29.87% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.46%
Values	Daily Returns

EOS  vs.  ApeCoin

EOS

Risk-Adjusted Performance

Very Weak

Over the last 90 days EOS 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 EOS shareholders.

ApeCoin

Risk-Adjusted Performance

Very Weak

Over the last 90 days ApeCoin 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 technical and 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 ApeCoin shareholders.

Pair Trading with EOS and ApeCoin

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

The idea behind EOS and ApeCoin 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.