Correlation Between SC and Drift Protocol
Can any of the company-specific risk be diversified away by investing in both SC and Drift Protocol 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 SC and Drift Protocol into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SC and Drift protocol, you can compare the effects of market volatilities on SC and Drift Protocol 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 SC with a short position of Drift Protocol. Check out your portfolio center. Please also check ongoing floating volatility patterns of SC and Drift Protocol.
Diversification Opportunities for SC and Drift Protocol
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SC and Drift is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding SC and Drift protocol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Drift protocol and SC 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 SC are associated (or correlated) with Drift Protocol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Drift protocol has no effect on the direction of SC i.e., SC and Drift Protocol go up and down completely randomly.
Pair Corralation between SC and Drift Protocol
Assuming the 90 days horizon SC is expected to under-perform the Drift Protocol. But the crypto coin apears to be less risky and, when comparing its historical volatility, SC is 1.35 times less risky than Drift Protocol. The crypto coin trades about -0.2 of its potential returns per unit of risk. The Drift protocol is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 139.00 in Drift protocol on December 1, 2024 and sell it today you would lose (68.00) from holding Drift protocol or give up 48.92% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
SC vs. Drift protocol
Performance |
Timeline |
SC |
Drift protocol |
SC and Drift Protocol Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SC and Drift Protocol
The main advantage of trading using opposite SC and Drift Protocol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SC position performs unexpectedly, Drift Protocol 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 Drift Protocol will offset losses from the drop in Drift Protocol's long position.The idea behind SC and Drift protocol 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.Drift Protocol vs. Staked Ether | Drift Protocol vs. Phala Network | Drift Protocol vs. EigenLayer | Drift Protocol vs. EOSDAC |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |