Correlation Between Orbs and PancakeSwap

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

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

Diversification Opportunities for Orbs and PancakeSwap

0.79

Correlation Coefficient

Orbs  PancakeSwap

Poor diversification

The 3 months correlation between Orbs and PancakeSwap is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Orbs and PancakeSwap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PancakeSwap and Orbs 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 Orbs 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 Orbs i.e., Orbs and PancakeSwap go up and down completely randomly.

Pair Corralation between Orbs and PancakeSwap

Assuming the 90 days trading horizon Orbs is expected to generate 1.16 times less return on investment than PancakeSwap. But when comparing it to its historical volatility, Orbs is 1.06 times less risky than PancakeSwap. It trades about 0.19 of its potential returns per unit of risk. PancakeSwap is currently generating about 0.21 of returns per unit of risk over similar time horizon. 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 Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Orbs  vs.  PancakeSwap

Orbs

Risk-Adjusted Performance

14 of 100

Good

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

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 Orbs and PancakeSwap

The main advantage of trading using opposite Orbs and PancakeSwap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orbs 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 Orbs 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.