Correlation Between Golem Network and Chiliz

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

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

Diversification Opportunities for Golem Network and Chiliz

0.93

Correlation Coefficient

Golem Network  Chiliz

Almost no diversification

The 3 months correlation between Golem and Chiliz is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Golem Network Token and Chiliz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chiliz and Golem Network 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 Golem Network Token are associated (or correlated) with Chiliz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chiliz has no effect on the direction of Golem Network i.e., Golem Network and Chiliz go up and down completely randomly.

Pair Corralation between Golem Network and Chiliz

Assuming the 90 days trading horizon Golem Network is expected to generate 1.4 times less return on investment than Chiliz. In addition to that, Golem Network is 1.12 times more volatile than Chiliz. It trades about 0.17 of its total potential returns per unit of risk. Chiliz is currently generating about 0.27 per unit of volatility. If you would invest  5.16  in Chiliz on September 3, 2024 and sell it today you would earn a total of  6.84  from holding Chiliz or generate 132.56% return on investment over 90 days.

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

Golem Network Token  vs.  Chiliz

Golem Network Token

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Golem Network Token are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady primary indicators, Golem Network exhibited solid returns over the last few months and may actually be approaching a breakup point.

Chiliz

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Chiliz are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Chiliz exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Golem Network and Chiliz

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

The idea behind Golem Network Token and Chiliz 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.