Correlation Between Curve DAO and JNT

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

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

Diversification Opportunities for Curve DAO and JNT

0.27

Correlation Coefficient

Curve DAO  JNT

Modest diversification

The 3 months correlation between Curve and JNT is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Curve DAO Token and JNT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JNT and Curve DAO 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 Curve DAO Token are associated (or correlated) with JNT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JNT has no effect on the direction of Curve DAO i.e., Curve DAO and JNT go up and down completely randomly.

Pair Corralation between Curve DAO and JNT

If you would invest  26.00  in Curve DAO Token on August 30, 2024 and sell it today you would earn a total of  25.00  from holding Curve DAO Token or generate 96.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	4.55%
Values	Daily Returns

Curve DAO Token  vs.  JNT

Curve DAO Token

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Curve DAO Token are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Curve DAO exhibited solid returns over the last few months and may actually be approaching a breakup point.

JNT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JNT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, JNT is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Curve DAO and JNT

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

The idea behind Curve DAO Token and JNT 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.

Check out your portfolio center.

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.