Correlation Between Uniswap Protocol and Quant

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

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

Diversification Opportunities for Uniswap Protocol and Quant

0.93

Correlation Coefficient

Uniswap Protocol  Quant

Almost no diversification

The 3 months correlation between Uniswap and Quant is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Uniswap Protocol Token and Quant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quant and Uniswap Protocol 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 Uniswap Protocol Token are associated (or correlated) with Quant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quant has no effect on the direction of Uniswap Protocol i.e., Uniswap Protocol and Quant go up and down completely randomly.

Pair Corralation between Uniswap Protocol and Quant

Assuming the 90 days trading horizon Uniswap Protocol Token is expected to under-perform the Quant. In addition to that, Uniswap Protocol is 1.11 times more volatile than Quant. It trades about -0.21 of its total potential returns per unit of risk. Quant is currently generating about -0.12 per unit of volatility. If you would invest  10,629  in Quant on December 30, 2024 and sell it today you would lose (3,695) from holding Quant or give up 34.76% of portfolio value over 90 days.

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

Uniswap Protocol Token  vs.  Quant

Uniswap Protocol Token

Risk-Adjusted Performance

Very Weak

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

Quant

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Uniswap Protocol and Quant

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

The idea behind Uniswap Protocol Token and Quant 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.