Correlation Between Worldcoin and Starknet

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

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

Diversification Opportunities for Worldcoin and Starknet

0.64

Correlation Coefficient

Worldcoin  Starknet

Poor diversification

The 3 months correlation between Worldcoin and Starknet is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Worldcoin and Starknet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Starknet 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 Starknet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Starknet has no effect on the direction of Worldcoin i.e., Worldcoin and Starknet go up and down completely randomly.

Pair Corralation between Worldcoin and Starknet

Assuming the 90 days trading horizon Worldcoin is expected to generate 1.2 times more return on investment than Starknet. However, Worldcoin is 1.2 times more volatile than Starknet. It trades about 0.16 of its potential returns per unit of risk. Starknet is currently generating about 0.19 per unit of risk. If you would invest  149.00  in Worldcoin on August 30, 2024 and sell it today you would earn a total of  109.00  from holding Worldcoin or generate 73.15% return on investment over 90 days.

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

Worldcoin  vs.  Starknet

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.

Starknet

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Starknet are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Starknet exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Worldcoin and Starknet

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

The idea behind Worldcoin and Starknet 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.