Correlation Between Worldcoin and UTK

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

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

Diversification Opportunities for Worldcoin and UTK

-0.04

Correlation Coefficient

Worldcoin  UTK

Good diversification

The 3 months correlation between Worldcoin and UTK is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Worldcoin and UTK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UTK 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 UTK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UTK has no effect on the direction of Worldcoin i.e., Worldcoin and UTK go up and down completely randomly.

Pair Corralation between Worldcoin and UTK

Assuming the 90 days trading horizon Worldcoin is expected to under-perform the UTK. But the crypto coin apears to be less risky and, when comparing its historical volatility, Worldcoin is 2.5 times less risky than UTK. The crypto coin trades about -0.16 of its potential returns per unit of risk. The UTK is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  4.98  in UTK on November 27, 2024 and sell it today you would earn a total of  4.17  from holding UTK or generate 83.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Worldcoin  vs.  UTK

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 March 2025. The latest tumult may also be a sign of longer-term up-swing for Worldcoin shareholders.

UTK

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in UTK are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady forward-looking signals, UTK exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Worldcoin and UTK

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

The idea behind Worldcoin and UTK 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .