Correlation Between OmiseGO and EOSDAC

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

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

Diversification Opportunities for OmiseGO and EOSDAC

0.81

Correlation Coefficient

OmiseGO  EOSDAC

Very poor diversification

The 3 months correlation between OmiseGO and EOSDAC is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding OmiseGO and EOSDAC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EOSDAC and OmiseGO 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 OmiseGO are associated (or correlated) with EOSDAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EOSDAC has no effect on the direction of OmiseGO i.e., OmiseGO and EOSDAC go up and down completely randomly.

Pair Corralation between OmiseGO and EOSDAC

Assuming the 90 days trading horizon OmiseGO is expected to under-perform the EOSDAC. In addition to that, OmiseGO is 1.01 times more volatile than EOSDAC. It trades about -0.17 of its total potential returns per unit of risk. EOSDAC is currently generating about -0.07 per unit of volatility. If you would invest  0.04  in EOSDAC on December 1, 2024 and sell it today you would lose (0.01) from holding EOSDAC or give up 37.85% of portfolio value over 90 days.

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

OmiseGO  vs.  EOSDAC

OmiseGO

Risk-Adjusted Performance

Very Weak

Over the last 90 days OmiseGO 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 OmiseGO shareholders.

EOSDAC

Risk-Adjusted Performance

Very Weak

Over the last 90 days EOSDAC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Crypto's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for EOSDAC investors.

Pair Trading with OmiseGO and EOSDAC

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

The idea behind OmiseGO and EOSDAC 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.