Correlation Between Chia and Savi Financial

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

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

Diversification Opportunities for Chia and Savi Financial

0.76

Correlation Coefficient

Chia  Savi Financial

Poor diversification

The 3 months correlation between Chia and Savi is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Chia and Savi Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Savi Financial 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 Savi Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Savi Financial has no effect on the direction of Chia i.e., Chia and Savi Financial go up and down completely randomly.

Pair Corralation between Chia and Savi Financial

Assuming the 90 days trading horizon Chia is expected to generate 44.56 times more return on investment than Savi Financial. However, Chia is 44.56 times more volatile than Savi Financial. It trades about 0.09 of its potential returns per unit of risk. Savi Financial is currently generating about 0.2 per unit of risk. If you would invest  1,418  in Chia on October 26, 2024 and sell it today you would earn a total of  528.00  from holding Chia or generate 37.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	93.65%
Values	Daily Returns

Chia  vs.  Savi Financial

Chia

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chia are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical indicators, Chia exhibited solid returns over the last few months and may actually be approaching a breakup point.

Savi Financial

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Savi Financial are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Savi Financial is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Chia and Savi Financial

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

The idea behind Chia and Savi Financial 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.