Correlation Between Convex Finance and Storj

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

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

Diversification Opportunities for Convex Finance and Storj

0.45

Correlation Coefficient

Convex Finance  Storj

Very weak diversification

The 3 months correlation between Convex and Storj is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Convex Finance and Storj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Storj and Convex Finance 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 Convex Finance are associated (or correlated) with Storj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Storj has no effect on the direction of Convex Finance i.e., Convex Finance and Storj go up and down completely randomly.

Pair Corralation between Convex Finance and Storj

Assuming the 90 days trading horizon Convex Finance is expected to generate 1.09 times less return on investment than Storj. In addition to that, Convex Finance is 1.08 times more volatile than Storj. It trades about 0.16 of its total potential returns per unit of risk. Storj is currently generating about 0.19 per unit of volatility. If you would invest  34.00  in Storj on September 3, 2024 and sell it today you would earn a total of  33.00  from holding Storj or generate 97.06% return on investment over 90 days.

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

Convex Finance  vs.  Storj

Convex Finance

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Convex Finance are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Convex Finance exhibited solid returns over the last few months and may actually be approaching a breakup point.

Storj

Risk-Adjusted Performance

14 of 100

Good

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

Pair Trading with Convex Finance and Storj

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

The idea behind Convex Finance and Storj 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.