Correlation Between Stellar and Status Network

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

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

Diversification Opportunities for Stellar and Status Network

0.77

Correlation Coefficient

Stellar  Status Network

Poor diversification

The 3 months correlation between Stellar and Status is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Stellar and Status Network Token in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Status Network Token and Stellar 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 Stellar are associated (or correlated) with Status Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Status Network Token has no effect on the direction of Stellar i.e., Stellar and Status Network go up and down completely randomly.

Pair Corralation between Stellar and Status Network

Assuming the 90 days trading horizon Stellar is expected to under-perform the Status Network. But the crypto coin apears to be less risky and, when comparing its historical volatility, Stellar is 1.25 times less risky than Status Network. The crypto coin trades about -0.12 of its potential returns per unit of risk. The Status Network Token is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  4.62  in Status Network Token on November 28, 2024 and sell it today you would lose (1.96) from holding Status Network Token or give up 42.42% of portfolio value over 90 days.

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

Stellar  vs.  Status Network Token

Stellar

Risk-Adjusted Performance

Very Weak

Over the last 90 days Stellar 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 primary 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 Stellar shareholders.

Status Network Token

Risk-Adjusted Performance

Very Weak

Over the last 90 days Status Network Token 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 March 2025. The latest tumult may also be a sign of longer-term up-swing for Status Network Token shareholders.

Pair Trading with Stellar and Status Network

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

The idea behind Stellar and Status Network Token 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.