Correlation Between Enjin Coin and Yearnfinance

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

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

Diversification Opportunities for Enjin Coin and Yearnfinance

0.92

Correlation Coefficient

Enjin Coin  Yearnfinance

Almost no diversification

The 3 months correlation between Enjin and Yearnfinance is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Enjin Coin and yearnfinance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on yearnfinance and Enjin Coin 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 Enjin Coin are associated (or correlated) with Yearnfinance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of yearnfinance has no effect on the direction of Enjin Coin i.e., Enjin Coin and Yearnfinance go up and down completely randomly.

Pair Corralation between Enjin Coin and Yearnfinance

Assuming the 90 days trading horizon Enjin Coin is expected to generate 1.65 times more return on investment than Yearnfinance. However, Enjin Coin is 1.65 times more volatile than yearnfinance. It trades about 0.25 of its potential returns per unit of risk. yearnfinance is currently generating about 0.21 per unit of risk. If you would invest  13.00  in Enjin Coin on September 2, 2024 and sell it today you would earn a total of  20.00  from holding Enjin Coin or generate 153.85% return on investment over 90 days.

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

Enjin Coin  vs.  yearnfinance

Enjin Coin

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Enjin Coin are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady forward-looking indicators, Enjin Coin exhibited solid returns over the last few months and may actually be approaching a breakup point.

yearnfinance

Risk-Adjusted Performance

16 of 100

Good

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

Pair Trading with Enjin Coin and Yearnfinance

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

The idea behind Enjin Coin and yearnfinance 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.