Correlation Between Tether and SKALE Network

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

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

Diversification Opportunities for Tether and SKALE Network

0.0

Correlation Coefficient

Tether  SKALE Network

Pay attention - limited upside

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

Pair Corralation between Tether and SKALE Network

If you would invest  3.10  in SKALE Network on August 30, 2024 and sell it today you would earn a total of  3.69  from holding SKALE Network or generate 119.03% return on investment over 90 days.

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

Tether  vs.  SKALE Network

Tether

Risk-Adjusted Performance

0 of 100

Very Weak

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

SKALE Network

Risk-Adjusted Performance

17 of 100

Solid

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

Pair Trading with Tether and SKALE Network

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

The idea behind Tether and SKALE 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.

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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.