Correlation Between USD Coin and Horizen

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

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

Diversification Opportunities for USD Coin and Horizen

0.0

Correlation Coefficient

USD Coin  Horizen

Pay attention - limited upside

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

Pair Corralation between USD Coin and Horizen

If you would invest  760.00  in Horizen on August 30, 2024 and sell it today you would earn a total of  864.00  from holding Horizen or generate 113.68% return on investment over 90 days.

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

USD Coin  vs.  Horizen

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.

Horizen

Risk-Adjusted Performance

17 of 100

Solid

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

Pair Trading with USD Coin and Horizen

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

The idea behind USD Coin and Horizen 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.