Correlation Between Ethereum and Artis REIT

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

By analyzing existing cross correlation between Ethereum and Artis REIT, you can compare the effects of market volatilities on Ethereum and Artis REIT 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 Artis REIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ethereum and Artis REIT.

Diversification Opportunities for Ethereum and Artis REIT

-0.71

Correlation Coefficient

Ethereum  Artis REIT

Pay attention - limited upside

The 3 months correlation between Ethereum and Artis is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Ethereum and Artis REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artis REIT 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 Artis REIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artis REIT has no effect on the direction of Ethereum i.e., Ethereum and Artis REIT go up and down completely randomly.

Pair Corralation between Ethereum and Artis REIT

Assuming the 90 days trading horizon Ethereum is expected to under-perform the Artis REIT. In addition to that, Ethereum is 3.56 times more volatile than Artis REIT. It trades about -0.17 of its total potential returns per unit of risk. Artis REIT is currently generating about -0.04 per unit of volatility. If you would invest  519.00  in Artis REIT on October 11, 2024 and sell it today you would lose (5.00) from holding Artis REIT or give up 0.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Ethereum  vs.  Artis REIT

Ethereum

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ethereum are ranked lower than 10 (%) 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.

Artis REIT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Artis REIT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Ethereum and Artis REIT

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

The idea behind Ethereum and Artis REIT 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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.