Correlation Between Polygon Ecosystem and VINCI

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

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

Diversification Opportunities for Polygon Ecosystem and VINCI

0.15

Correlation Coefficient

Polygon Ecosystem  VINCI

Average diversification

The 3 months correlation between Polygon and VINCI is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Polygon Ecosystem Token and VINCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VINCI and Polygon Ecosystem 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 Polygon Ecosystem Token are associated (or correlated) with VINCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VINCI has no effect on the direction of Polygon Ecosystem i.e., Polygon Ecosystem and VINCI go up and down completely randomly.

Pair Corralation between Polygon Ecosystem and VINCI

Assuming the 90 days trading horizon Polygon Ecosystem Token is expected to under-perform the VINCI. In addition to that, Polygon Ecosystem is 2.57 times more volatile than VINCI. It trades about -0.15 of its total potential returns per unit of risk. VINCI is currently generating about -0.03 per unit of volatility. If you would invest  1,192  in VINCI on November 27, 2024 and sell it today you would lose (83.00) from holding VINCI or give up 6.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Polygon Ecosystem Token  vs.  VINCI

Polygon Ecosystem Token

Risk-Adjusted Performance

Very Weak

Over the last 90 days Polygon Ecosystem Token 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 essential indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for Polygon Ecosystem Token shareholders.

VINCI

Risk-Adjusted Performance

Very Weak

Over the last 90 days VINCI has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, VINCI is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Polygon Ecosystem and VINCI

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

The idea behind Polygon Ecosystem Token and VINCI 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..