Correlation Between Kamino and Polygon Ecosystem

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

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

Diversification Opportunities for Kamino and Polygon Ecosystem

0.26

Correlation Coefficient

Kamino  Polygon Ecosystem

Modest diversification

The 3 months correlation between Kamino and Polygon is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Kamino and Polygon Ecosystem Token in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polygon Ecosystem Token and Kamino 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 Kamino are associated (or correlated) with Polygon Ecosystem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polygon Ecosystem Token has no effect on the direction of Kamino i.e., Kamino and Polygon Ecosystem go up and down completely randomly.

Pair Corralation between Kamino and Polygon Ecosystem

Assuming the 90 days trading horizon Kamino is expected to generate 24.76 times more return on investment than Polygon Ecosystem. However, Kamino is 24.76 times more volatile than Polygon Ecosystem Token. It trades about 0.13 of its potential returns per unit of risk. Polygon Ecosystem Token is currently generating about 0.14 per unit of risk. If you would invest  3.96  in Kamino on September 1, 2024 and sell it today you would earn a total of  11.04  from holding Kamino or generate 278.79% return on investment over 90 days.

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

Kamino  vs.  Polygon Ecosystem Token

Kamino

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kamino are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Kamino exhibited solid returns over the last few months and may actually be approaching a breakup point.

Polygon Ecosystem Token

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Polygon Ecosystem Token are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady essential indicators, Polygon Ecosystem exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kamino and Polygon Ecosystem

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

The idea behind Kamino and Polygon Ecosystem Token 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.