Correlation Between Ethereum and Shaanxi Lighte
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By analyzing existing cross correlation between Ethereum and Shaanxi Lighte Optoelectronics, you can compare the effects of market volatilities on Ethereum and Shaanxi Lighte 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 Shaanxi Lighte. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ethereum and Shaanxi Lighte.
Diversification Opportunities for Ethereum and Shaanxi Lighte
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ethereum and Shaanxi is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Ethereum and Shaanxi Lighte Optoelectronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaanxi Lighte Optoe 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 Shaanxi Lighte. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shaanxi Lighte Optoe has no effect on the direction of Ethereum i.e., Ethereum and Shaanxi Lighte go up and down completely randomly.
Pair Corralation between Ethereum and Shaanxi Lighte
Assuming the 90 days trading horizon Ethereum is expected to generate 1.22 times more return on investment than Shaanxi Lighte. However, Ethereum is 1.22 times more volatile than Shaanxi Lighte Optoelectronics. It trades about 0.15 of its potential returns per unit of risk. Shaanxi Lighte Optoelectronics is currently generating about 0.06 per unit of risk. If you would invest 243,903 in Ethereum on October 10, 2024 and sell it today you would earn a total of 97,337 from holding Ethereum or generate 39.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Ethereum vs. Shaanxi Lighte Optoelectronics
Performance |
Timeline |
Ethereum |
Shaanxi Lighte Optoe |
Ethereum and Shaanxi Lighte Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ethereum and Shaanxi Lighte
The main advantage of trading using opposite Ethereum and Shaanxi Lighte positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ethereum position performs unexpectedly, Shaanxi Lighte 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 Shaanxi Lighte will offset losses from the drop in Shaanxi Lighte's long position.The idea behind Ethereum and Shaanxi Lighte Optoelectronics 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.Shaanxi Lighte vs. Youyou Foods Co | Shaanxi Lighte vs. Guilin Seamild Foods | Shaanxi Lighte vs. Jiahe Foods Industry | Shaanxi Lighte vs. Chongqing Changan Automobile |
Check out your portfolio center.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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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