Correlation Between Soluna Holdings and NFT

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

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

Diversification Opportunities for Soluna Holdings and NFT

0.67

Correlation Coefficient

Soluna Holdings  NFT

Poor diversification

The 3 months correlation between Soluna and NFT is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Soluna Holdings and NFT Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NFT Limited and Soluna Holdings 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 Soluna Holdings are associated (or correlated) with NFT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NFT Limited has no effect on the direction of Soluna Holdings i.e., Soluna Holdings and NFT go up and down completely randomly.

Pair Corralation between Soluna Holdings and NFT

Given the investment horizon of 90 days Soluna Holdings is expected to generate 0.76 times more return on investment than NFT. However, Soluna Holdings is 1.32 times less risky than NFT. It trades about 0.02 of its potential returns per unit of risk. NFT Limited is currently generating about 0.02 per unit of risk. If you would invest  294.00  in Soluna Holdings on October 24, 2024 and sell it today you would lose (86.00) from holding Soluna Holdings or give up 29.25% of portfolio value over 90 days.

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

Soluna Holdings  vs.  NFT Limited

Soluna Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Soluna Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

NFT Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NFT Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Soluna Holdings and NFT

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

The idea behind Soluna Holdings and NFT Limited 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.