Aave vs Chainlink (AAVE vs LINK) 2026: Crypto Returns, Risk & Volatility

Q: Which is a better investment: AAVE or LINK?

Over the past year, LINK looks like the better investment: it had higher total return (LINK -38.2% vs AAVE -44.4%) and a higher Sharpe ratio (LINK -0.24 vs AAVE -0.28). On risk, LINK was less volatile (LINK 81.1% vs AAVE 87.3%), LINK had a smaller max drawdown (LINK -69.9% vs AAVE -74.8%), and LINK had less severe losses on the worst 5% of days (Expected Shortfall of LINK -9.06% vs AAVE -10.53%).

Written by Gale Finance Team

Reviewed by Sid Kalla CFA Charterholder

Quick answer

Which is a better investment: AAVE or LINK?

Over the past year, LINK outperformed AAVE. LINK returned -38.2% compared with AAVE’s -44.4%. LINK had the better risk-adjusted return, with a Sharpe ratio of -0.24 versus AAVE’s -0.28. LINK was less volatile than AAVE, and LINK had a smaller max drawdown than AAVE.

Total Return

AAVE -44.4%

LINK -38.2%

Sharpe Ratio

AAVE -0.28

LINK -0.24

Annualized Volatility

AAVE 87.3%

LINK 81.1%

Max Drawdown

AAVE -74.8%

LINK -69.9%

Metric winners: Total Return: LINK; Sharpe Ratio: LINK; Annualized Volatility: LINK (less volatile); Max Drawdown: LINK (smaller drawdown).

AAVE Total Return

↓ -44.4%

LINK Total Return

↓ -38.2%

Relative Performance of AAVE vs LINK (Normalized to 100)

AAVE LINK

Normalized to 100 at start date for comparison

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Key Takeaways

Total Return: AAVE delivered a -44.4% total return, while LINK returned -38.2% over the same period. LINK outperformed on total returns.
Risk-Adjusted Return (Sharpe Ratio): Both Sharpe ratios were negative (LINK -0.24 vs AAVE -0.28), meaning both underperformed the risk-free rate; LINK was less negative.
Volatility (Annualized): AAVE was more volatile, with 87.3% annualized volatility, versus 81.1% for LINK.
Maximum Drawdown: LINK's maximum drawdown was -69.9%, while AAVE experienced a deeper drawdown of -74.8%.
Tail Risk (VaR & Expected Shortfall): At the 5% level (daily log returns), AAVE's VaR was -6.81% and its Expected Shortfall (CVaR) was -10.53%; LINK's were -6.73% and -9.06%. VaR is the cutoff; Expected Shortfall is the average move on the worst days.
Skew & Kurtosis: Skew: AAVE -0.19 vs LINK -0.13. Excess kurtosis: AAVE 2.11 vs LINK 2.84. Negative skew leans downside; higher excess kurtosis means fatter tails.
Tail Days & Extremes: 2σ tail days (down/up): AAVE 8/9, LINK 6/11. Worst day: AAVE -18.03% (2026-02-05) vs LINK -20.60% (2025-10-10). Best day: AAVE +19.20% (2025-05-08) vs LINK +14.63% (2026-02-24).
Risk ratios: Sortino - AAVE: -0.40 vs. LINK: -0.35 , Calmar - AAVE: -0.60 vs. LINK: -0.55 , Sterling - AAVE: -1.60 vs. LINK: -1.04 , Treynor - AAVE: -0.10 vs. LINK: -0.09 , Ulcer Index - AAVE: 43.53% vs. LINK: 42.51%

Investment Comparison

If you invested $10,000 in each asset on April 24, 2025:

AAVE $5,559.18 -44.4%

LINK $6,175.48 -38.2%

Difference: $616.3 (LINK ahead)

Aave vs Chainlink Performance Over Time

Metric	AAVE	LINK
30 Days	-16.9%	-0.9%
90 Days	-40.5%	-24%
180 Days	-58.8%	-48.4%
1 Year	-44.4%	-38.2%

Shorter time frames can show different leaders as market conditions change. Consider your investment horizon when comparing performance.

Aave vs Chainlink Correlation

Average Correlation

strongly correlated

0.61

Current (30-day) 0.72

30-day rolling range -0.31 to +0.97

Aave and Chainlink are strongly correlated over the past year. With a correlation of 0.61, these assets tend to move together, limiting diversification benefits.

For portfolio construction, this strong correlation means holding both AAVE and LINK provides limited risk reduction — they're likely to decline together in downturns.

Metric	Value
Current (30-day)	0.72
Average (full period)	0.61
Minimum (30-day rolling)	-0.31
Maximum (30-day rolling)	0.97

Correlation measures how closely two assets move together. Values near +1 indicate strong co-movement, near 0 indicates independence, and negative values indicate inverse movement. Current, minimum, and maximum figures are 30-day rolling correlations on shared daily returns.

Drawdown

Maximum Drawdown

AAVE

-74.8%

LINK

-69.9%

Aave experienced its maximum drawdown of -74.8% from 2025-08-23 to 2026-04-11. It has not yet recovered to its previous peak.

Chainlink experienced its maximum drawdown of -69.9% from 2025-08-22 to 2026-02-04. It has not yet recovered to its previous peak.

Smaller drawdowns and faster recoveries indicate lower downside risk and greater resilience during market stress.

Aave vs Chainlink Volatility (AAVE vs LINK)

AAVE Volatility

87.3%

±4.57% 1-day vol

LINK Volatility

81.1%

±4.25% 1-day vol

1-day volatility (1σ)

AAVE

±4.57%

LINK

±4.25%

Aave's 87.3% annualized volatility translates to about ±4.57% one-standard-deviation daily volatility.

Chainlink's 81.1% annualized volatility translates to about ±4.25% one-standard-deviation daily volatility.

AAVE had the wider volatility profile over this window. That means its day-to-day return distribution was broader; LINK was calmer, but lower volatility does not by itself mean better returns.

Treat the ± daily figure as a one-standard-deviation estimate from historical returns, not a forecast or expected absolute daily move. For context, 15-18% annualized volatility is roughly ±1% one-standard-deviation daily volatility.

Risk-adjusted ratios

Sharpe Ratio of AAVE and LINK

Sharpe Ratio: AAVE vs. LINK

Return per total volatility

Sharpe gives us excess return per unit of risk. Upside and downside volatility both count as risk.

Higher is better

excess return / total volatility

Formula

\displaystyle \mathrm{Sharpe} = \frac{\mathbb{E}[R] - R_f}{\sigma_R}

Sharpe ratio measures return per unit of risk (volatility). A higher Sharpe indicates better risk-adjusted performance. Both Sharpe ratios were negative (LINK -0.24 vs AAVE -0.28), meaning both underperformed the risk-free rate; LINK was less negative.

A Sharpe above 1.0 is generally considered good, above 2.0 is excellent. Negative Sharpe means the asset underperformed the risk-free rate. Calculated on each asset's full 365-day lookback of available prices and annualized using the asset calendar (365 for crypto, 252 trading days for equities/ETFs/metals).

Sortino Ratio of AAVE and LINK

Sortino Ratio: AAVE vs. LINK

Return per downside volatility

Sortino keeps the return-over-risk idea, but only returns below the target rate count as volatility.

Higher is better

excess return / downside volatility

Formula

\displaystyle \mathrm{Sortino} = \frac{\mathbb{E}[R] - R_f}{\sigma_{\mathrm{down}}}

Sortino ratio measures return per unit of downside risk. Unlike Sharpe, it only counts downside deviation (returns below the target return). LINK had better downside-adjusted returns.

A higher Sortino is better. It's useful when upside volatility is common (crypto is the obvious example). Downside deviation: AAVE 61.4% vs LINK 55.8%. Calculated on each asset's full 365-day lookback of available prices, using the daily risk-free rate as the target return, and annualized using the asset calendar (365 for crypto, 252 trading days for equities/ETFs/metals).

Calmar Ratio of AAVE and LINK

Calmar Ratio: AAVE vs. LINK

CAGR per worst drawdown

Calmar compares CAGR against the single deepest peak-to-trough loss over the period.

Higher is better

CAGR / max drawdown

Formula

\displaystyle \mathrm{Calmar} = \frac{\mathrm{CAGR}}{|\mathrm{MaxDD}|}

Calmar ratio compares CAGR to maximum drawdown. Higher Calmar means more return per unit of worst drawdown. LINK posted the higher Calmar ratio.

Calmar is computed on each asset's full 365-day lookback and uses the max drawdown over that same window.

Sterling Ratio of AAVE and LINK

Sterling Ratio: AAVE vs. LINK

Return per average drawdown

Sterling smooths the drawdown penalty by using average drawdown events instead of only the worst one.

Higher is better

excess annual return / average deep drawdown

Formula

\displaystyle \mathrm{Sterling} = \frac{\mathrm{CAGR} - R_f}{\overline{D}_{>10\%}}

Sterling ratio measures excess return per unit of average drawdown (typically drawdowns worse than 10%). LINK posted the higher Sterling ratio.

Sterling uses average drawdown events deeper than 10% and subtracts the risk-free rate to report excess return.

Treynor Ratio of AAVE and LINK

Treynor Ratio: AAVE vs. LINK

Excess return per market beta

Treynor divides excess annualized return by beta — the sensitivity of the asset to broad-market moves. The slope shown is each asset’s beta vs SPY.

Higher is better

excess return / market beta

Formula

\displaystyle \mathrm{Treynor} = \frac{\mathbb{E}[R] - R_f}{\beta}

Treynor ratio measures excess return per unit of market risk (beta) instead of total volatility. LINK posted the higher Treynor ratio.

Treynor uses beta vs the S&P 500 (SPY) on shared dates and the average 3-month Treasury rate as the risk-free rate.

Ulcer Index of AAVE and LINK

Ulcer Index: AAVE vs. LINK

Drawdown pain

Ulcer Index is a risk index, not a return-over-risk ratio. Lower means smaller and shorter drawdowns.

Lower is better

root-mean-square drawdown

Formula

\displaystyle \mathrm{UI} = \sqrt{\mathbb{E}[D_t^2]}

Ulcer Index captures drawdown depth and duration. Lower Ulcer Index means less drawdown pain. LINK had the lower Ulcer Index (less drawdown pain).

Ulcer Index is computed from each asset's drawdown series over the full lookback window.

Tail Risk & Distribution Shape (1-Year): Aave vs. Chainlink

This section looks at the shape of daily returns, not just the average. Tail stats are computed per asset on its own daily series (crypto includes weekends). We use daily log returns $\ln\left(\frac{P_t}{P_{t-1}}\right)$ so multi-day moves add cleanly.

Definitions: Value at Risk (VaR), Expected Shortfall, skew, kurtosis, and fat tails.

Tail Risk & Distribution Shape: AAVE vs. LINK (1-Year)

Actual daily return tails

The bars are real daily log-return observations from the article window. Darker bars are observations at or beyond each asset’s 5% VaR cutoff.

Observed returns

VaR marks the 5th percentile loss cutoff; Expected Shortfall averages the observations beyond that cutoff.

Formula

\displaystyle \mathrm{VaR}_{5\%}=Q_{0.05}(r_t),\quad \mathrm{ES}_{5\%}=\mathbb{E}[r_t\mid r_t\le \mathrm{VaR}_{5\%}]

Metric (1-Year)	AAVE	LINK
5% VaR (daily log return)	-6.81%	-6.73%
5% Expected Shortfall (CVaR)	-10.53% (worst 19 days)	-9.06% (worst 19 days)
Skew	-0.19	-0.13
Excess kurtosis	2.11	2.84
2σ tail days (down / up)	8 / 9	6 / 11
Worst day	-18.03% (2026-02-05)	-20.60% (2025-10-10)
Best day	+19.20% (2025-05-08)	+14.63% (2026-02-24)

Downside co-moves (2σ) — 1-Year

Computed on shared dates only (n=364). A “2σ downside move” means a shared-close log return more than 2 standard deviations below that asset’s own mean on this shared-date series. Dates below show simple returns (%) for readability.

Downside co-move map: AAVE vs. LINK (2σ)

Shared-close daily returns

Dots mark actual downside days: asset-colored dots are one-sided downside moves, and red dots are joint downside days. Grey dots add sampled shared-return context when available. The shaded lower-left zone shows where both AAVE and LINK crossed their own 2σ downside threshold.

2σ

Show downside tail dates

Dates below are shared-date observations. The “Date” is the period end (close). Tail thresholds are computed on log returns, but the table shows simple returns (%) for readability. Returns are computed from the previous shared close to this one (for example, Friday → Monday includes weekend moves).

Days when both AAVE and LINK had a big down day (2σ)

Date (interval)	AAVE	LINK
2025-10-10	-16.90%	-20.60%
2025-11-03	-13.36%	-13.27%

Days when AAVE had a big down day

Date (interval)	AAVE	LINK
2025-10-10	-16.90%	-20.60%
2025-11-03	-13.36%	-13.27%
2025-11-14	-12.45%	-4.93%
2025-12-22	-8.95%	+1.09%
2026-02-05	-18.03%	+11.47%
2026-03-03	-9.06%	+6.31%
2026-04-17	-10.52%	-3.71%
2026-04-18	-13.27%	-2.52%

Days when LINK had a big down day

Date (interval)	AAVE	LINK
2025-08-19	-3.92%	-8.66%
2025-08-25	-8.63%	-9.46%
2025-10-10	-16.90%	-20.60%
2025-11-03	-13.36%	-13.27%
2026-01-30	-6.31%	-9.02%
2026-02-04	-0.90%	-12.47%

Read this as “how ugly the ugly days get”, not as a precise forecast. One-year samples are small, so tail estimates are inherently noisy.

Full Comparison of Aave vs. Chainlink (1-Year)

Metric	AAVE	LINK
Total Return	-44.4%	-38.2%
Annualized Volatility	87.3%	81.1%
Sharpe Ratio	-0.28	-0.24
Sortino Ratio	-0.40	-0.35
Calmar Ratio	-0.60	-0.55
Sterling Ratio	-1.60	-1.04
Treynor Ratio	-0.10	-0.09
Ulcer Index	43.53%	42.51%
Max Drawdown	-74.8%	-69.9%
Avg Correlation to S&P 500	0.45	0.41
5% VaR (daily log return)	-6.81%	-6.73%
5% Expected Shortfall (CVaR)	-10.53%	-9.06%
Skew	-0.19	-0.13
Excess kurtosis	2.11	2.84
2σ tail days (down / up)	8 / 9	6 / 11

Audit this calculation

Formulas, inputs, and conventions used to compute the metrics on this page.

Inputs & conventions

Shared window for pair metrics: 2025-04-24 → 2026-04-23 (last shared close).
Rolling correlation sample (shared closes): 335 rolling 30-day values (from 364 shared daily returns).
Annualization (days/year): AAVE: 365 days/year; LINK: 365 days/year.
Risk-free rate: Uses the 3-month U.S. Treasury yield (FRED: DGS3MO), averaged over each asset’s window:

AAVE: 4.17% over 2025-04-24 → 2026-04-23.

LINK: 4.17% over 2025-04-24 → 2026-04-23.
Volatility drag (rule of thumb): Estimated from annualized volatility (simple returns). For the log-return framing, see Log returns.

AAVE: ≈ -38.1%/yr

LINK: ≈ -32.9%/yr
Data alignment: No forward fill. Correlation and tail co-moves are computed on shared closes only.
For cross-calendar pairs (e.g., crypto vs stocks), weekend/holiday moves roll into the next shared close.
Return conventions: Volatility/Sharpe/Sortino use simple daily returns. Tail-risk uses daily log returns for distribution stats (but tables show simple returns). Log returns.

Formulas

Daily simple return

r_t = \frac{P_t}{P_{t-1}} - 1

Volatility

\sigma_{ann} = \sigma(r_t)\sqrt{A}

Volatility drag (approx.)

\text{drag} \approx \tfrac{1}{2}\sigma_{ann}^2

Sharpe Ratio

S = \frac{A\,\bar{r} - r_f}{\sigma(r_t)\sqrt{A}}

Sortino Ratio

So = \frac{A\,\bar{r} - r_f}{\sqrt{\mathbb{E}[\min(0,\,r_t - r_f/A)^2]}\,\sqrt{A}}

Maximum Drawdown

MDD = \min_t\left(\frac{P_t}{\max_{s \le t} P_s} - 1\right)

Average Correlation

\rho = \frac{\operatorname{cov}(r^A,\,r^B)}{\sigma_A\,\sigma_B}

Log returns

\ell_t = \ln\left(\frac{P_t}{P_{t-1}}\right)

Notation

$P_t$: Price on day t.
$r_t$: Simple daily return.
$\ell_t$: Log daily return.
$\bar{r}$: Average daily return.
$\sigma(r_t)$: Standard deviation of daily returns.
$A$: Annualization factor (days/year).
$r_f$: Annual risk-free rate.

Aave vs Chainlink: Frequently Asked Questions

Which has higher volatility: AAVE or LINK?

AAVE showed higher volatility at 87.3% annualized, compared to 81.1% for LINK Over the past year. Higher volatility means larger price swings in both directions.

Does AAVE provide diversification when held with LINK?

AAVE and LINK are strongly correlated over the past year, with an average correlation of 0.61. This strong correlation limits diversification benefits.

How bad are the worst 5% days for AAVE vs LINK?

Over the past year, AAVE's 5% VaR was -6.81% and its 5% Expected Shortfall was -10.53% (worst 19 days). LINK's were -6.73% and -9.06% (worst 19 days).

Do AAVE and LINK crash together on bad days?

On shared dates (n=364), when LINK has a 2σ down day, AAVE also does 33.3% (2/6 days). In the other direction, when AAVE has one, LINK also does 25.0% (2/8 days).

Which has better risk-adjusted returns: AAVE or LINK?

Both assets posted negative Sharpe ratios Over the past year (LINK -0.24 vs AAVE -0.28), meaning both underperformed the risk-free rate; LINK was less negative.

Can AAVE and LINK be combined in a portfolio?

Yes, though allocation sizing matters. Their strong correlation provides limited risk reduction since they tend to move together. AAVE's higher volatility (87.3%) means even small allocations can materially impact overall portfolio risk.

Explore our financial glossary

Which is a better investment: AAVE or LINK?

Share This Comparison of AAVE vs LINK

Relative Performance of AAVE vs LINK (Normalized to 100)

Trade AAVE or LINK

Key Takeaways

Investment Comparison

Aave vs Chainlink Performance Over Time

Aave vs Chainlink Correlation

Drawdown

Aave vs Chainlink Volatility (AAVE vs LINK)

Risk-adjusted ratios

Sharpe Ratio of AAVE and LINK

Sharpe Ratio: AAVE vs. LINK

Sortino Ratio of AAVE and LINK

Sortino Ratio: AAVE vs. LINK

Calmar Ratio of AAVE and LINK

Calmar Ratio: AAVE vs. LINK

Sterling Ratio of AAVE and LINK

Sterling Ratio: AAVE vs. LINK

Treynor Ratio of AAVE and LINK

Treynor Ratio: AAVE vs. LINK

Ulcer Index of AAVE and LINK

Ulcer Index: AAVE vs. LINK

Tail Risk & Distribution Shape (1-Year): Aave vs. Chainlink

Tail Risk & Distribution Shape: AAVE vs. LINK (1-Year)

Downside co-moves (2σ) — 1-Year

Downside co-move map: AAVE vs. LINK (2σ)

Days when both AAVE and LINK had a big down day (2σ)

Days when AAVE had a big down day

Days when LINK had a big down day

Full Comparison of Aave vs. Chainlink (1-Year)

Inputs & conventions

Formulas

Aave vs Chainlink: Frequently Asked Questions

Which has higher volatility: AAVE or LINK?

Does AAVE provide diversification when held with LINK?

How bad are the worst 5% days for AAVE vs LINK?

Do AAVE and LINK crash together on bad days?

Which has better risk-adjusted returns: AAVE or LINK?

Can AAVE and LINK be combined in a portfolio?