Correlation Between Worldcoin and MVL

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

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

Diversification Opportunities for Worldcoin and MVL

0.65

Correlation Coefficient

Worldcoin  MVL

Poor diversification

The 3 months correlation between Worldcoin and MVL is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Worldcoin and MVL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MVL 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 MVL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MVL has no effect on the direction of Worldcoin i.e., Worldcoin and MVL go up and down completely randomly.

Pair Corralation between Worldcoin and MVL

Assuming the 90 days trading horizon Worldcoin is expected to under-perform the MVL. But the crypto coin apears to be less risky and, when comparing its historical volatility, Worldcoin is 1.78 times less risky than MVL. The crypto coin trades about -0.19 of its potential returns per unit of risk. The MVL is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  0.37  in MVL on December 30, 2024 and sell it today you would lose (0.04) from holding MVL or give up 11.72% of portfolio value over 90 days.

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

Worldcoin  vs.  MVL

Worldcoin

Risk-Adjusted Performance

Very Weak

Over the last 90 days Worldcoin 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 fundamental 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 Worldcoin shareholders.

MVL

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MVL are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady essential indicators, MVL exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Worldcoin and MVL

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

The idea behind Worldcoin and MVL 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.