Correlation Between Chia and NewWave USD

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

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

Diversification Opportunities for Chia and NewWave USD

0.45

Correlation Coefficient

Chia  NewWave USD

Very weak diversification

The 3 months correlation between Chia and NewWave is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Chia and NewWave USD Currency in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewWave USD Currency and Chia 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 Chia are associated (or correlated) with NewWave USD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewWave USD Currency has no effect on the direction of Chia i.e., Chia and NewWave USD go up and down completely randomly.

Pair Corralation between Chia and NewWave USD

Assuming the 90 days trading horizon Chia is expected to under-perform the NewWave USD. In addition to that, Chia is 8.56 times more volatile than NewWave USD Currency. It trades about -0.12 of its total potential returns per unit of risk. NewWave USD Currency is currently generating about -0.06 per unit of volatility. If you would invest  187,700  in NewWave USD Currency on December 23, 2024 and sell it today you would lose (5,200) from holding NewWave USD Currency or give up 2.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.38%
Values	Daily Returns

Chia  vs.  NewWave USD Currency

Chia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chia 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 technical 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 Chia shareholders.

NewWave USD Currency

Risk-Adjusted Performance

Very Weak

Over the last 90 days NewWave USD Currency has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, NewWave USD is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Chia and NewWave USD

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

The idea behind Chia and NewWave USD Currency 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.