Correlation Between Lido DAO and Sui

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

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

Diversification Opportunities for Lido DAO and Sui

0.6

Correlation Coefficient

Lido DAO  Sui

Poor diversification

The 3 months correlation between Lido and Sui is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Lido DAO and Sui in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sui and Lido DAO 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 Lido DAO are associated (or correlated) with Sui. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sui has no effect on the direction of Lido DAO i.e., Lido DAO and Sui go up and down completely randomly.

Pair Corralation between Lido DAO and Sui

Assuming the 90 days trading horizon Lido DAO is expected to generate 2.34 times less return on investment than Sui. In addition to that, Lido DAO is 1.12 times more volatile than Sui. It trades about 0.14 of its total potential returns per unit of risk. Sui is currently generating about 0.38 per unit of volatility. If you would invest  80.00  in Sui on August 30, 2024 and sell it today you would earn a total of  265.00  from holding Sui or generate 331.25% return on investment over 90 days.

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

Lido DAO  vs.  Sui

Lido DAO

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lido DAO are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Lido DAO exhibited solid returns over the last few months and may actually be approaching a breakup point.

Sui

Risk-Adjusted Performance

29 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Sui are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady forward indicators, Sui exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lido DAO and Sui

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

The idea behind Lido DAO and Sui 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.