Correlation Between FileCoin and Coin98

Can any of the company-specific risk be diversified away by investing in both FileCoin and Coin98 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 FileCoin and Coin98 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FileCoin and Coin98, you can compare the effects of market volatilities on FileCoin and Coin98 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 FileCoin with a short position of Coin98. Check out your portfolio center. Please also check ongoing floating volatility patterns of FileCoin and Coin98.

Diversification Opportunities for FileCoin and Coin98

0.97

Correlation Coefficient

FileCoin  Coin98

Almost no diversification

The 3 months correlation between FileCoin and Coin98 is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding FileCoin and Coin98 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coin98 and FileCoin 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 FileCoin are associated (or correlated) with Coin98. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coin98 has no effect on the direction of FileCoin i.e., FileCoin and Coin98 go up and down completely randomly.

Pair Corralation between FileCoin and Coin98

Assuming the 90 days trading horizon FileCoin is expected to generate 1.01 times less return on investment than Coin98. But when comparing it to its historical volatility, FileCoin is 1.29 times less risky than Coin98. It trades about 0.27 of its potential returns per unit of risk. Coin98 is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  11.00  in Coin98 on September 3, 2024 and sell it today you would earn a total of  12.00  from holding Coin98 or generate 109.09% return on investment over 90 days.

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

FileCoin  vs.  Coin98

FileCoin

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in FileCoin are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady essential indicators, FileCoin exhibited solid returns over the last few months and may actually be approaching a breakup point.

Coin98

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Coin98 are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Coin98 exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FileCoin and Coin98

The main advantage of trading using opposite FileCoin and Coin98 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FileCoin position performs unexpectedly, Coin98 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 Coin98 will offset losses from the drop in Coin98's long position.

The idea behind FileCoin and Coin98 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.