Correlation Between BEL and Staked Ether

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

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

Diversification Opportunities for BEL and Staked Ether

-0.43

Correlation Coefficient

BEL  Staked Ether

Very good diversification

The 3 months correlation between BEL and Staked is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding BEL and Staked Ether in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Staked Ether and BEL 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 BEL are associated (or correlated) with Staked Ether. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Staked Ether has no effect on the direction of BEL i.e., BEL and Staked Ether go up and down completely randomly.

Pair Corralation between BEL and Staked Ether

Assuming the 90 days trading horizon BEL is expected to generate 1.85 times more return on investment than Staked Ether. However, BEL is 1.85 times more volatile than Staked Ether. It trades about 0.09 of its potential returns per unit of risk. Staked Ether is currently generating about -0.19 per unit of risk. If you would invest  56.00  in BEL on December 29, 2024 and sell it today you would earn a total of  17.00  from holding BEL or generate 30.36% return on investment over 90 days.

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

BEL  vs.  Staked Ether

BEL

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BEL are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady essential indicators, BEL exhibited solid returns over the last few months and may actually be approaching a breakup point.

Staked Ether

Risk-Adjusted Performance

Very Weak

Over the last 90 days Staked Ether has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for Staked Ether shareholders.

Pair Trading with BEL and Staked Ether

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

The idea behind BEL and Staked Ether 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.