Correlation Between Helium and PancakeSwap

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

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

Diversification Opportunities for Helium and PancakeSwap

-0.12

Correlation Coefficient

Helium  PancakeSwap

Good diversification

The 3 months correlation between Helium and PancakeSwap is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Helium and PancakeSwap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PancakeSwap and Helium 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 Helium are associated (or correlated) with PancakeSwap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PancakeSwap has no effect on the direction of Helium i.e., Helium and PancakeSwap go up and down completely randomly.

Pair Corralation between Helium and PancakeSwap

Assuming the 90 days trading horizon Helium is expected to generate 5.73 times less return on investment than PancakeSwap. In addition to that, Helium is 1.09 times more volatile than PancakeSwap. It trades about 0.03 of its total potential returns per unit of risk. PancakeSwap is currently generating about 0.21 per unit of volatility. 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 Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Helium  vs.  PancakeSwap

Helium

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Helium are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Helium may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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.

Pair Trading with Helium and PancakeSwap

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

The idea behind Helium and PancakeSwap 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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.