Correlation Between Empire State and FTX Token

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

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

Diversification Opportunities for Empire State and FTX Token

0.58

Correlation Coefficient

Empire State  FTX Token

Very weak diversification

The 3 months correlation between Empire and FTX is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and FTX Token in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTX Token and Empire State 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 Empire State Realty are associated (or correlated) with FTX Token. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FTX Token has no effect on the direction of Empire State i.e., Empire State and FTX Token go up and down completely randomly.

Pair Corralation between Empire State and FTX Token

Given the investment horizon of 90 days Empire State Realty is expected to generate 0.27 times more return on investment than FTX Token. However, Empire State Realty is 3.7 times less risky than FTX Token. It trades about -0.23 of its potential returns per unit of risk. FTX Token is currently generating about -0.25 per unit of risk. If you would invest  1,006  in Empire State Realty on December 28, 2024 and sell it today you would lose (223.00) from holding Empire State Realty or give up 22.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.83%
Values	Daily Returns

Empire State Realty  vs.  FTX Token

Empire State Realty

Risk-Adjusted Performance

Very Weak

Over the last 90 days Empire State Realty has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

FTX Token

Risk-Adjusted Performance

Very Weak

Over the last 90 days FTX Token has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Crypto's basic 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 FTX Token shareholders.

Pair Trading with Empire State and FTX Token

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

The idea behind Empire State Realty and FTX Token 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.