Correlation Between Solana and Manta Network

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

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

Diversification Opportunities for Solana and Manta Network

0.56

Correlation Coefficient

Solana  Manta Network

Very weak diversification

The 3 months correlation between Solana and Manta is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Solana and Manta Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manta Network and Solana 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 Solana are associated (or correlated) with Manta Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manta Network has no effect on the direction of Solana i.e., Solana and Manta Network go up and down completely randomly.

Pair Corralation between Solana and Manta Network

Assuming the 90 days trading horizon Solana is expected to generate 1.04 times less return on investment than Manta Network. But when comparing it to its historical volatility, Solana is 1.54 times less risky than Manta Network. It trades about 0.25 of its potential returns per unit of risk. Manta Network is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  65.00  in Manta Network on August 30, 2024 and sell it today you would earn a total of  47.00  from holding Manta Network or generate 72.31% return on investment over 90 days.

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

Solana  vs.  Manta Network

Solana

Risk-Adjusted Performance

19 of 100

Solid

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

Manta Network

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Manta Network are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Manta Network exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Solana and Manta Network

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

The idea behind Solana and Manta Network 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.