By examining the cross-correlation between Cosmos and Algorand, investors can assess how market volatility affects both assets and determine the level of diversification they offer when combined in a portfolio. Traders can also apply pair trading strategies, such as taking a long position in Cosmos while simultaneously shorting Algorand.
Over a 3-month period, the correlation between Cosmos and Algorand is 0.87, indicating a weak level of diversification. This superimposed area illustrates the volume of risk that holding both assets in the same portfolio can diversify, without any changes. The correlation coefficient assesses the degree to which ATOM and ALGO move together, with values ranging from -1 to +1. A correlation of 0 indicates no relationship between the rate movements of ATOM and ALGO.
Compared to Algorand, Cosmos is a relatively less risky investment, with a risk-return ratio of about 2.21 times lower. For every unit of risk taken on ATOM, it is estimated that only about 0.08 units of potential return are generated. On the other hand, ALGO is currently generating a lower return of around 0.06 units per unit of risk during the same period.
Some investors consider market fluctuations as a chance to acquire cryptocurrencies at a good price or to bet against them to gain profit from a potential bearish trend. It's advisable to exercise caution and ensure a complete understanding of the investment position before acting during times of market volatility.
For example, Algorand is currently bearish (65%) and Cosmos is bullish (72%), which suggests that now is the right time to buy ATOM coins. This trend, which can change in an instant, is determined by technical indicators on forecasting sites. Therefore, when deciding to invest in both currencies, an investor needs to choose the right time in order to avoid costly mistakes and get the maximum benefit from the transaction.
It is also important to determine your investment strategies. Over the past 3 months, ALGO has shown more volatility than ATOM, so the first currency can be used as a short-term investment, buying it when the price is lower and selling when it rises. Cosmos, on the contrary, is a bit less volatile, and coin staking rewards are 22% APY, while ALGO staking rewards users only 7% APY, making ATOM coin staking more profitable.
Investing in crypto is a constant monitoring. Each successful investor, having added Cosmos and Algorand to their equities, should constantly check their portfolio, market trends and ongoing floating volatility patterns.
Owing to the strong demand, ATOM and ALGO are available on decent exchanges. Consequently, any exchange with an excellent reputation and favorable terms for its users is appropriate for ATOM vs ALGO trading.
Many prefer Godex.io owing to the fact that there is no trading bounds, and there is no need to verify trader’s identity and reveal personal data. Moreover, by fixing the exchange wager for the duration of the transaction, users are protected from losses that may originate from market fluctuations.
The ATOM vs ALGO debate is ongoing, with supporters on both sides making strong arguments for their chosen investment. Ultimately, investors should carefully analyze the strengths and weaknesses of each option, and make a decision based on their own specific circumstances and risk tolerance.
It's difficult to say which one is better to invest in between ATOM and ALGO. Potential returns of either investment option vary depending on the market conditions at a particular time. Therefore, analyzing current data before making any investment decisions is vital.
It's not a question of one being better than the other. Both Cosmos and Algorand have unique traits that appeal to different types of investors. Therefore, you should consider your investment objectives and do thorough research in order to determine which one is the best fit for you.
Cosmos (ATOM) is a project with a promising future, as it is actively developed and has a solid community behind it. However, the success of any cryptocurrency project depends on various factors, including market trends, adoption, and competition. Therefore, it is difficult to predict the future of any crypto with certainty. Nonetheless, Cosmos's unique features, such as interoperability and scalability, make it an attractive option for many developers and businesses. Overall, the future of ATOM and Cosmos seems to be bright, but it's important to keep an eye on the market and any developments that may affect the project's growth.
