Correlation Between Worldcoin and Kaspa

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

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

Diversification Opportunities for Worldcoin and Kaspa

-0.33

Correlation Coefficient

Worldcoin  Kaspa

Very good diversification

The 3 months correlation between Worldcoin and Kaspa is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Worldcoin and Kaspa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaspa and Worldcoin 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 Worldcoin are associated (or correlated) with Kaspa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaspa has no effect on the direction of Worldcoin i.e., Worldcoin and Kaspa go up and down completely randomly.

Pair Corralation between Worldcoin and Kaspa

Assuming the 90 days trading horizon Worldcoin is expected to generate 1.2 times less return on investment than Kaspa. In addition to that, Worldcoin is 1.04 times more volatile than Kaspa. It trades about 0.2 of its total potential returns per unit of risk. Kaspa is currently generating about 0.25 per unit of volatility. If you would invest  11.00  in Kaspa on August 30, 2024 and sell it today you would earn a total of  4.00  from holding Kaspa or generate 36.36% return on investment over 90 days.

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

Worldcoin  vs.  Kaspa

Worldcoin

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Worldcoin are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Worldcoin exhibited solid returns over the last few months and may actually be approaching a breakup point.

Kaspa

Risk-Adjusted Performance

0 of 100

Weak

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

Pair Trading with Worldcoin and Kaspa

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

The idea behind Worldcoin and Kaspa 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.