Correlation Between Ethereum and CleanGo Innovations

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

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

Diversification Opportunities for Ethereum and CleanGo Innovations

0.49

Correlation Coefficient

Ethereum  CleanGo Innovations

Very weak diversification

The 3 months correlation between Ethereum and CleanGo is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Ethereum and CleanGo Innovations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CleanGo Innovations 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 CleanGo Innovations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CleanGo Innovations has no effect on the direction of Ethereum i.e., Ethereum and CleanGo Innovations go up and down completely randomly.

Pair Corralation between Ethereum and CleanGo Innovations

Assuming the 90 days trading horizon Ethereum is expected to generate 0.84 times more return on investment than CleanGo Innovations. However, Ethereum is 1.19 times less risky than CleanGo Innovations. It trades about 0.15 of its potential returns per unit of risk. CleanGo Innovations is currently generating about 0.07 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	Weak
Accuracy	96.83%
Values	Daily Returns

Ethereum  vs.  CleanGo Innovations

Ethereum

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ethereum are ranked lower than 11 (%) 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.

CleanGo Innovations

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CleanGo Innovations are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, CleanGo Innovations reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ethereum and CleanGo Innovations

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

The idea behind Ethereum and CleanGo Innovations 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.