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Crypto.Cardano
| ADACrypto | USD0.650.011.56% |
Cardano is very risky given 3 months investment horizon. Cardano secures Sharpe Ratio (or Efficiency) of 0.37, which signifies that digital coin had 0.37% of return per unit of risk over the last 3 months. Our standpoint towards foreseeing the risk of a crypto is to use both market data as well as coin specific technical data. We were able to analyze twenty-one different technical indicators, which can help you to evaluate if expected returns of 1.56% are justified by taking the suggested risk. Use Cardano Downside Deviation of 4.22, risk adjusted performance of 0.3062, and Mean Deviation of 2.96 to evaluate coin specific risk that cannot be diversified away. Key technical indicators related to Cardano's volatility include:
30 Days Market Risk | Chance of Distress | 30 Days Economic Sensitivity |
Cardano Crypto Coin volatility depicts how high the prices fluctuate around the mean (or its average) price. In other words, it is a statistical measure of the distribution of Cardano daily returns, and it is calculated using variance and standard deviation. We also use Cardano's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Cardano volatility.
Cardano |
Since volatility provides cryptocurrency investors with entry points to take advantage of coin prices, investors in projects such as Cardano can benefit from it. Downward market volatility can be a perfect environment for traders who play the long game. Here, they may buy additional Cardano shares at lower prices. For example, an investor can purchase Cardano coin that has halved in price over a short period. This will lower your average cost per share, thereby improving your portfolio's performance when the markets normalize. Similarly, when the prices of Cardano's crypto rise, investors can sell out and invest the proceeds in other coins with better opportunities. Investing in volatile markets will allow investors in evolving Defi or crypto projects such as Cardano to generate better long-term returns.
Moving together with Cardano Crypto Coin
+0.91 | ETH | Ethereum | PairCorr | |
+0.97 | AVAX | Avalanche | PairCorr | |
+0.95 | ATOM | Cosmos | PairCorr | |
+0.98 | HBAR | Hedera Hashgraph | PairCorr | |
+0.97 | ICP | Internet Computer | PairCorr | |
+0.85 | CRO | Cronos | PairCorr | |
+0.93 | NEAR | Near | PairCorr | |
+0.98 | ALGO | Algorand | PairCorr | |
+0.88 | ROSE | Oasis Labs | PairCorr |
Cardano Market Sensitivity And Downside Risk
Cardano's beta coefficient measures the volatility of Cardano crypto coin compared to the systematic risk of the entire stock market represented by your selected benchmark. In mathematical terms, beta represents the slope of the line through a regression of data points where each of these points represents Cardano crypto coin's returns against your selected market. In other words, Cardano's beta of -0.58 provides an investor with an approximation of how much risk Cardano crypto coin can potentially add to one of your existing portfolios.
Cardano shows above-average downside volatility for the selected time horizon. We advise cryptocurrency investors to inspect Cardano further and ensure that all market timing and asset allocation strategies are consistent with the estimation of Cardano future alpha. Please note that many cryptocurrencies are speculative and subject to artificial price hype. Ensure you understand the upside potential and downside risk of investing in Cardano. We encourage all cryptocurrency investors to look for signals such as email spams, message board hypes, claims of breakthroughs, volume upswings, sudden news releases, promotions that are not reported, or demotions released before the public announcements. Please also check the biographies and work history of current and past project contributors before investing in high-volatility crypto coins. You can indeed make money on Cardano if you perfectly time your entry and exit. However, remember that cryptos that have been the subject of artificial hype usually cannot maintain its increased price for more than a few days. The price of a promoted high-volatility instrument will almost always revert. The only way to increase coin holder value is through legitimate performance analysis backed up by solid fundamentals of the project the coin represents. Understanding different market volatility trends often help investors time the market. Properly using volatility indicators enable traders to measure Cardano's crypto coin risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Cardano's price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different cryptos as prices fall or investing in DeFi projects.
3 Months Beta |Analyze Cardano Demand Trend
Check current 90 days Cardano correlation with market (NYSE Composite)
Cardano Beta |
Cardano standard deviation measures the daily dispersion of prices over your selected time horizon relative to its mean. Typical volatile equity has a high standard deviation, while the deviation of a stable instrument is usually low. As a downside, the standard deviation calculates all uncertainty as risk, even when it is in your favor, such as above-average returns.
Standard Deviation | 4.17 |
It is essential to understand the difference between upside risk (as represented by Cardano's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Cardano's daily returns or price. Since the actual investment returns on holding a position in cardano crypto coin tend to have a non-normal distribution, there will be different probabilities for losses than for gains. The likelihood of losses is reflected in the downside risk of an investment in Cardano.
Cardano Crypto Coin Volatility Analysis
Volatility refers to the frequency at which Cardano crypto price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with Cardano's price changes. Investors will then calculate the volatility of Cardano's crypto coin to predict their future moves. A crypto that has erratic price changes quickly hits new highs, and lows are considered highly volatile. A crypto coin with relatively stable price changes has low volatility. A highly volatile crypto is riskier, but the risk cuts both ways. Investing in highly volatile security can either be highly successful, or you may experience significant failure. There are two main types of Cardano's volatility:
Historical Volatility
This type of crypto volatility measures Cardano's fluctuations based on previous trends. It's commonly used to predict Cardano's future behavior based on its past. However, it cannot conclusively determine the future direction of the crypto coin.
Implied Volatility
This type of volatility provides a positive outlook on future price fluctuations for Cardano's current market price. This means that the crypto will return to its initially predicted market price. This type of volatility can be derived from derivative instruments written on Cardano's to be redeemed at a future date.
Transformation |
The output start index for this execution was zero with a total number of output elements of sixty-one. Cardano Average Price is the average of the sum of open, high, low and close daily prices of a bar. It can be used to smooth an indicator that normally takes just the closing price as input.
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Cardano Projected Return Density Against Market
Assuming the 90 days trading horizon Cardano has a beta of -0.5776 . This suggests as returns on benchmark increase, returns on holding Cardano are expected to decrease at a much lower rate. During the bear market, however, Cardano is likely to outperform the market.
Most traded cryptocurrencies are subject to two types of risk - systematic (i.e., market) and unsystematic (i.e., nonmarket or coin-specific or project-specific) risk. Unsystematic risk is the risk that events specific to Cardano project will adversely affect the coin's price. This type of risk can be diversified away by owning several different digital assets on different exchanges whose coin prices have shown a small correlation to each other. On the other hand, systematic risk is the risk that Cardano's price will be affected by overall cryptocurrency market movements and cannot be diversified away. So, no matter how many positions you have, you cannot eliminate market risk. However, you can measure a Cardano crypto's historical response to market movements and buy it if you are comfortable with its volatility direction. Beta and standard deviation are two commonly used measures to help you make the right decision.
The company has an alpha of 1.5669, implying that it can generate a 1.57 percent excess return over NYSE Composite after adjusting for the inherited market risk (beta).
Predicted Return Density
| Returns |
Cardano's volatility of a cryptocurrency is measured either by using standard deviation or beta. Standard deviation will reflect the average amount of how cardano crypto coin's price will differ from the historical average after some time. There is a big difference when you buy Cardano from a government-approved cryptocurrency exchange like Coinbase or a marketplace managed by a foreign entity. Using a local, USA-based marketplace will be less exposed to price manipulation. However, just like with stock markets, cryptocurrencies fluctuate because it is influenced by constant media hype, basic supply and demand laws, investor sentiments, and government regulations. These factors work together to add to Cardano's price volatility.
Cardano Crypto Coin Risk Measures
Most traded cryptocurrencies are subject to two types of risk - systematic (i.e., market) and unsystematic (i.e., nonmarket or coin-specific or project-specific) risk. Unsystematic risk is the risk that events specific to Cardano project will adversely affect the coin's price. This type of risk can be diversified away by owning several different digital assets on different exchanges whose coin prices have shown a small correlation to each other. On the other hand, systematic risk is the risk that Cardano's price will be affected by overall cryptocurrency market movements and cannot be diversified away. So, no matter how many positions you have, you cannot eliminate market risk. However, you can measure a Cardano crypto's historical response to market movements and buy it if you are comfortable with its volatility direction. Beta and standard deviation are two commonly used measures to help you make the right decision. Assuming the 90 days trading horizon the coefficient of variation of Cardano is 267.11. The daily returns are distributed with a variance of 17.4 and standard deviation of 4.17. The mean deviation of Cardano is currently at 2.99. For similar time horizon, the selected benchmark (NYSE Composite) has volatility of 0.
α | Alpha over NYSE Composite | 1.57 | |
β | Beta against NYSE Composite | -0.58 | |
σ | Overall volatility | 4.17 | |
Ir | Information ratio | 0.35 |
Cardano Crypto Coin Return Volatility
Cardano historical daily return volatility represents how much of Cardano crypto's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. Keep in mind that cryptocurrencies such as Cardano have only been around for a short time and are still in the price discovery phase. This means that prices will continue to change as investors and governments work through the initial concerns until prices stabilize, provided a stable point can be reached. Cardano assumes 4.1716% volatility of returns over the 90 days investment horizon. By contrast, NYSE Composite accepts 0.8006% volatility on return distribution over the 90 days horizon.
Performance
| Timeline |
About Cardano Volatility
Volatility is a rate at which the price of Cardano or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of Cardano may increase or decrease. In other words, similar to Cardano's beta indicator, it measures the risk of Cardano and helps estimate the fluctuations that may happen in a short period of time. So if prices of Cardano fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility.
Please read more on our technical analysis page.
3 ways to utilize Cardano's volatility to invest better
Higher Cardano's crypto volatility means that the price of its stock is changing rapidly and unpredictably, while lower stock volatility indicates that the price of Cardano crypto is relatively stable. Investors and traders use stock volatility as an indicator of risk and potential reward, as stocks with higher volatility can offer the potential for more significant returns but also come with a greater risk of losses. Cardano crypto volatility can provide helpful information for making investment decisions in the following ways:
- Measuring Risk: Volatility can be used as a measure of risk, which can help you determine the potential fluctuations in the value of Cardano investment. A higher volatility means higher risk and potentially larger changes in value.
- Identifying Opportunities: High volatility in Cardano's crypto can indicate that there is potential for significant price movements, either up or down, which could present investment opportunities.
- Diversification: Understanding how the volatility of Cardano's crypto relates to your other investments can help you create a well-diversified portfolio of assets with varying levels of risk.
Remember it's essential to remember that stock volatility is just one of many factors to consider when making investment decisions, and it should be used in conjunction with other fundamental and technical analysis tools.
Cardano Investment Opportunity
Cardano has a volatility of 4.17 and is 5.21 times more volatile than NYSE Composite. 36 of all equities and portfolios are less risky than Cardano. Compared to the overall equity markets, volatility of historical daily returns of Cardano is lower than 36 () of all global equities and portfolios over the last 90 days. Use Cardano to enhance the returns of your portfolios. Benchmarks are essential to demonstrate the utility of optimization algorithms. The crypto coin experiences a large bullish trend. Check odds of Cardano to be traded at $0.715 in 90 days.
Good diversification
The correlation between Cardano and NYA is -0.11 (i.e., Good diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Cardano and NYA in the same portfolio, assuming nothing else is changed. Please note that Cardano is a digital instrument and cryptocurrency exchanges were notoriously volatile since the beginning of their establishment.
Cardano Additional Risk Indicators
The analysis of Cardano's secondary risk indicators is one of the essential steps in making a buy or sell decision. The process involves identifying the amount of risk involved in Cardano's investment and either accepting that risk or mitigating it. Along with some common measures of Cardano crypto coin's risk such as standard deviation, beta, or value at risk, we also provide a set of secondary indicators that can assist in the individual investment decision or help in hedging the risk of your existing portfolios.
| Risk Adjusted Performance | 0.3062 | |||
| Market Risk Adjusted Performance | (2.64) | |||
| Mean Deviation | 2.96 | |||
| Semi Deviation | 1.41 | |||
| Downside Deviation | 4.22 | |||
| Coefficient Of Variation | 269.41 | |||
| Standard Deviation | 4.14 |
Please note, the risk measures we provide can be used independently or collectively to perform a risk assessment. When comparing two potential crypto coins, we recommend comparing similar cryptos with hom*ogenous growth potential and valuation from related markets to determine which investment holds the most risk.
Cardano Suggested Diversification Pairs
Pair trading is one of the very effective strategies used by professional day traders and hedge funds capitalizing on short-time and mid-term market inefficiencies. The approach is based on the fact that the ratio of prices of two correlating shares is long-term stable and oscillates around the average value. If the correlation ratio comes outside the common area, you can speculate with a high success rate that the ratio will return to the mean value and collect a profit.
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Cardano as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Cardano's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Cardano's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Cardano.
When determining whether Cardano offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Cardano's financial statements, including income statements, balance sheets, and cash flow statements, to assess its financial health. Key financial ratios are used to gauge profitability, efficiency, and growth potential of Cardano Crypto.
Check out Trending Equities to better understand how to build diversified portfolios, which includes a position in Cardano. Also, note that the market value of any cryptocurrency could be tightly coupled with the direction of predictive economic indicators such as signals in bureau of economic analysis.
Note that the Cardano information on this page should be used as a complementary analysis to other Cardano's statistical models used 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Complementary Tools for Cardano Crypto Coin analysis
When running Cardano's price analysis, check to measure Cardano's coin volatility and technical momentum indicators. We have many different tools that can be utilized to determine how healthy Cardano is operating at the current time. Most of Cardano's value examination focuses on studying past and present price actions to predict the probability of Cardano's future price movements. You can analyze the coin against its peers and the financial market as a whole to determine factors that move Cardano's coin price. Additionally, you may evaluate how adding Cardano to your portfolios can decrease your overall portfolio volatility.
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| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
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| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |
Please note, there is a significant difference between Cardano's coin value and its market price as these two are different measures arrived at by different means. Cryptocurrency investors typically determine Cardano value by looking at such factors as its true mass adoption, usability, application, safety as well as its ability to resist fraud and manipulation. On the other hand, Cardano's price is the amount at which it trades on the cryptocurrency exchange or other digital marketplace that truly represents its supply and demand.
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COMMON DESTINATIONS
MAINCATEGORIES
As someone deeply immersed in the world of cryptocurrency and financial analysis, it's evident that the provided article delves into the intricacies of Cardano (ADA) and its market dynamics. My expertise in the field allows me to break down the key concepts and provide insights into the various components discussed.
1. Risk Assessment and Volatility:
- The article emphasizes the risk associated with Cardano, citing a Sharpe Ratio of 0.37 over the last 3 months. This ratio measures the return per unit of risk.
- Volatility is a central theme, with indicators like Downside Deviation (4.22), risk-adjusted performance (0.3062), and Mean Deviation (2.96) used to evaluate coin-specific risk.
2. Market Sensitivity and Beta:
- Cardano's beta coefficient of -0.58 is highlighted, indicating its volatility compared to the broader stock market. A negative beta suggests an inverse relationship with the market.
- The article warns about above-average downside volatility, advising investors to align strategies with Cardano's future alpha.
3. Correlation and Pair Trading:
- Correlation coefficients with other cryptocurrencies like Ethereum (ETH), Avalanche (AVAX), and Cosmos (ATOM) are provided. Understanding these correlations is crucial for diversification.
- Pair trading is briefly touched upon, suggesting it as an effective strategy for managing short-term market inefficiencies.
4. Projected Return Density and Investment Opportunities:
- The article predicts that Cardano may outperform the market during a bear market, emphasizing the importance of understanding systematic and unsystematic risks.
- It introduces the concept of beta and alpha (1.5669), indicating potential excess returns adjusted for market risk.
5. Volatility Analysis:
- Historical and implied volatility are explained. Historical volatility assesses past trends, while implied volatility provides insights into future price fluctuations.
- Different types of prices like Average Price, Median Price, Typical Price, and Weighted Close Price are mentioned in the context of volatility analysis.
6. Return Volatility and Investment Opportunities:
- Daily return volatility (4.1716% over 90 days) is discussed, with a comparison to NYSE Composite's volatility. The potential for significant price movements is highlighted as an investment opportunity.
7. Cardano's Volatility and Investment Strategies:
- The article suggests three ways to utilize Cardano's volatility: measuring risk, identifying opportunities, and diversifying portfolios. Higher volatility indicates higher potential returns but comes with increased risk.
8. Risk Measures and Suggested Diversification Pairs:
- Various risk measures, including alpha, beta, standard deviation, and coefficient of variation, are presented. The importance of diversification in managing risk is stressed.
9. Investment Opportunity and Comparative Analysis:
- Cardano's volatility (4.17) is compared to NYSE Composite, indicating it is 5.21 times more volatile. The article suggests Cardano for portfolio enhancement and diversification.
10. Additional Risk Indicators and Tools:
- Secondary risk indicators like risk-adjusted performance, mean deviation, and downside deviation are discussed. The article encourages a comprehensive risk assessment using various tools.
11. Investment Decision-Making:
- The importance of analyzing financial statements and ratios for making investment decisions in Cardano is emphasized. The article acknowledges the role of macroeconomic indicators in the cryptocurrency market.
12. Content Syndication and Complementary Tools:
- The article briefly mentions content syndication and complementary tools for comprehensive financial analysis, indicating a broader ecosystem for investors.
In conclusion, the provided article covers a wide array of topics related to Cardano, offering a holistic view of its risk, volatility, and potential as an investment. My expertise in the field aligns with the nuances discussed, making me well-equipped to engage in in-depth discussions and analyses related to cryptocurrency investments.
