Correlation Between Solana and Marinade Staked

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

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

Diversification Opportunities for Solana and Marinade Staked

1.0

Correlation Coefficient

Solana  Marinade Staked

No risk reduction

The 3 months correlation between Solana and Marinade is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Solana and Marinade Staked SOL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marinade Staked SOL and Solana 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 Solana are associated (or correlated) with Marinade Staked. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marinade Staked SOL has no effect on the direction of Solana i.e., Solana and Marinade Staked go up and down completely randomly.

Pair Corralation between Solana and Marinade Staked

Assuming the 90 days trading horizon Solana is expected to generate 1.02 times less return on investment than Marinade Staked. In addition to that, Solana is 1.03 times more volatile than Marinade Staked SOL. It trades about 0.27 of its total potential returns per unit of risk. Marinade Staked SOL is currently generating about 0.28 per unit of volatility. If you would invest  15,464  in Marinade Staked SOL on September 1, 2024 and sell it today you would earn a total of  14,536  from holding Marinade Staked SOL or generate 94.0% return on investment over 90 days.

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

Solana  vs.  Marinade Staked SOL

Solana

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Solana are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady essential indicators, Solana exhibited solid returns over the last few months and may actually be approaching a breakup point.

Marinade Staked SOL

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Marinade Staked SOL are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Marinade Staked exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Solana and Marinade Staked

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

The idea behind Solana and Marinade Staked SOL 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.