Correlation Between Tezos and Curve DAO

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

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

Diversification Opportunities for Tezos and Curve DAO

0.97

Correlation Coefficient

Tezos  Curve DAO

Almost no diversification

The 3 months correlation between Tezos and Curve is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Tezos and Curve DAO Token in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Curve DAO Token and Tezos 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 Tezos are associated (or correlated) with Curve DAO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Curve DAO Token has no effect on the direction of Tezos i.e., Tezos and Curve DAO go up and down completely randomly.

Pair Corralation between Tezos and Curve DAO

Assuming the 90 days trading horizon Tezos is expected to under-perform the Curve DAO. But the crypto coin apears to be less risky and, when comparing its historical volatility, Tezos is 1.65 times less risky than Curve DAO. The crypto coin trades about -0.22 of its potential returns per unit of risk. The Curve DAO Token is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  89.00  in Curve DAO Token on December 29, 2024 and sell it today you would lose (40.00) from holding Curve DAO Token or give up 44.94% of portfolio value over 90 days.

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

Tezos  vs.  Curve DAO Token

Tezos

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tezos 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 April 2025. The latest tumult may also be a sign of longer-term up-swing for Tezos shareholders.

Curve DAO Token

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Tezos and Curve DAO

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

The idea behind Tezos and Curve DAO 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.