Correlation Between Phala Network and Bitget Token

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

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

Diversification Opportunities for Phala Network and Bitget Token

0.69

Correlation Coefficient

Phala Network  Bitget Token

Poor diversification

The 3 months correlation between Phala and Bitget is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Phala Network and Bitget token in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitget token and Phala 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 Phala Network are associated (or correlated) with Bitget Token. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitget token has no effect on the direction of Phala Network i.e., Phala Network and Bitget Token go up and down completely randomly.

Pair Corralation between Phala Network and Bitget Token

Assuming the 90 days trading horizon Phala Network is expected to generate 2.5 times more return on investment than Bitget Token. However, Phala Network is 2.5 times more volatile than Bitget token. It trades about 0.01 of its potential returns per unit of risk. Bitget token is currently generating about 0.02 per unit of risk. If you would invest  20.00  in Phala Network on December 21, 2024 and sell it today you would lose (8.00) from holding Phala Network or give up 40.0% of portfolio value over 90 days.

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

Phala Network  vs.  Bitget token

Phala Network

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Phala Network are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Phala Network exhibited solid returns over the last few months and may actually be approaching a breakup point.

Bitget token

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bitget token are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental drivers, Bitget Token may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Phala Network and Bitget Token

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

The idea behind Phala Network and Bitget token 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.