Correlation Between PancakeSwap and Jupiter

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

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

Diversification Opportunities for PancakeSwap and Jupiter

0.5

Correlation Coefficient

PancakeSwap  Jupiter

Very weak diversification

The 3 months correlation between PancakeSwap and Jupiter is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding PancakeSwap and Jupiter in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jupiter and PancakeSwap 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 PancakeSwap are associated (or correlated) with Jupiter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jupiter has no effect on the direction of PancakeSwap i.e., PancakeSwap and Jupiter go up and down completely randomly.

Pair Corralation between PancakeSwap and Jupiter

Assuming the 90 days trading horizon PancakeSwap is expected to generate 0.97 times more return on investment than Jupiter. However, PancakeSwap is 1.03 times less risky than Jupiter. It trades about 0.21 of its potential returns per unit of risk. Jupiter is currently generating about 0.17 per unit of risk. If you would invest  167.00  in PancakeSwap on September 2, 2024 and sell it today you would earn a total of  139.00  from holding PancakeSwap or generate 83.23% return on investment over 90 days.

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

PancakeSwap  vs.  Jupiter

PancakeSwap

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in PancakeSwap are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, PancakeSwap exhibited solid returns over the last few months and may actually be approaching a breakup point.

Jupiter

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jupiter are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Jupiter exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PancakeSwap and Jupiter

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

The idea behind PancakeSwap and Jupiter 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.