Correlation Between Ethereum and Hwang Chang

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

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

Diversification Opportunities for Ethereum and Hwang Chang

-0.8

Correlation Coefficient

Ethereum  Hwang Chang

Pay attention - limited upside

The 3 months correlation between Ethereum and Hwang is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Ethereum and Hwang Chang General in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hwang Chang General and Ethereum 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 Ethereum are associated (or correlated) with Hwang Chang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hwang Chang General has no effect on the direction of Ethereum i.e., Ethereum and Hwang Chang go up and down completely randomly.

Pair Corralation between Ethereum and Hwang Chang

Assuming the 90 days trading horizon Ethereum is expected to generate 1.04 times more return on investment than Hwang Chang. However, Ethereum is 1.04 times more volatile than Hwang Chang General. It trades about 0.19 of its potential returns per unit of risk. Hwang Chang General is currently generating about -0.03 per unit of risk. If you would invest  238,440  in Ethereum on October 9, 2024 and sell it today you would earn a total of  129,385  from holding Ethereum or generate 54.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Ethereum  vs.  Hwang Chang General

Ethereum

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ethereum are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical indicators, Ethereum exhibited solid returns over the last few months and may actually be approaching a breakup point.

Hwang Chang General

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hwang Chang General has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Ethereum and Hwang Chang

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

The idea behind Ethereum and Hwang Chang General 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.