Correlation Between IOST and Mina Protocol

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

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

Diversification Opportunities for IOST and Mina Protocol

0.89

Correlation Coefficient

IOST  Mina Protocol

Very poor diversification

The 3 months correlation between IOST and Mina is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding IOST and Mina Protocol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mina Protocol and IOST 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 IOST are associated (or correlated) with Mina Protocol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mina Protocol has no effect on the direction of IOST i.e., IOST and Mina Protocol go up and down completely randomly.

Pair Corralation between IOST and Mina Protocol

Assuming the 90 days trading horizon IOST is expected to generate 1.03 times less return on investment than Mina Protocol. In addition to that, IOST is 1.09 times more volatile than Mina Protocol. It trades about 0.23 of its total potential returns per unit of risk. Mina Protocol is currently generating about 0.26 per unit of volatility. If you would invest  43.00  in Mina Protocol on September 3, 2024 and sell it today you would earn a total of  45.00  from holding Mina Protocol or generate 104.65% return on investment over 90 days.

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

IOST  vs.  Mina Protocol

IOST

Risk-Adjusted Performance

17 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in IOST are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, IOST exhibited solid returns over the last few months and may actually be approaching a breakup point.

Mina Protocol

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mina Protocol are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Mina Protocol exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IOST and Mina Protocol

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

The idea behind IOST and Mina Protocol 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.