Correlation Between USD Coin and Sandbox

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

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

Diversification Opportunities for USD Coin and Sandbox

0.0

Correlation Coefficient

USD Coin  Sandbox

Pay attention - limited upside

The 3 months correlation between USD and Sandbox is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding USD Coin and The Sandbox in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandbox and USD Coin 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 USD Coin are associated (or correlated) with Sandbox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sandbox has no effect on the direction of USD Coin i.e., USD Coin and Sandbox go up and down completely randomly.

Pair Corralation between USD Coin and Sandbox

If you would invest  26.00  in The Sandbox on August 30, 2024 and sell it today you would earn a total of  35.00  from holding The Sandbox or generate 134.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

USD Coin  vs.  The Sandbox

USD Coin

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days USD Coin has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, USD Coin is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Sandbox

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in The Sandbox are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Sandbox exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with USD Coin and Sandbox

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

The idea behind USD Coin and The Sandbox 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.