Correlation Between Worldcoin and KIN

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

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

Diversification Opportunities for Worldcoin and KIN

-0.66

Correlation Coefficient

Worldcoin  KIN

Excellent diversification

The 3 months correlation between Worldcoin and KIN is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Worldcoin and KIN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KIN and Worldcoin 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 Worldcoin are associated (or correlated) with KIN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KIN has no effect on the direction of Worldcoin i.e., Worldcoin and KIN go up and down completely randomly.

Pair Corralation between Worldcoin and KIN

Assuming the 90 days trading horizon Worldcoin is expected to generate 1.12 times more return on investment than KIN. However, Worldcoin is 1.12 times more volatile than KIN. It trades about 0.23 of its potential returns per unit of risk. KIN is currently generating about -0.04 per unit of risk. If you would invest  141.00  in Worldcoin on September 1, 2024 and sell it today you would earn a total of  223.00  from holding Worldcoin or generate 158.16% return on investment over 90 days.

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

Worldcoin  vs.  KIN

Worldcoin

Risk-Adjusted Performance

17 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Worldcoin are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Worldcoin exhibited solid returns over the last few months and may actually be approaching a breakup point.

KIN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KIN 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 December 2024. The latest tumult may also be a sign of longer-term up-swing for KIN shareholders.

Pair Trading with Worldcoin and KIN

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

The idea behind Worldcoin and KIN 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.