Correlation Between Ethereum and CaliberCos

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

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

Diversification Opportunities for Ethereum and CaliberCos

-0.69

Correlation Coefficient

Ethereum  CaliberCos

Excellent diversification

The 3 months correlation between Ethereum and CaliberCos is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Ethereum and CaliberCos Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CaliberCos Class A 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 CaliberCos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CaliberCos Class A has no effect on the direction of Ethereum i.e., Ethereum and CaliberCos go up and down completely randomly.

Pair Corralation between Ethereum and CaliberCos

Assuming the 90 days trading horizon Ethereum is expected to generate 0.66 times more return on investment than CaliberCos. However, Ethereum is 1.51 times less risky than CaliberCos. It trades about 0.12 of its potential returns per unit of risk. CaliberCos Class A is currently generating about 0.0 per unit of risk. If you would invest  247,970  in Ethereum on October 25, 2024 and sell it today you would earn a total of  77,356  from holding Ethereum or generate 31.2% return on investment over 90 days.

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

Ethereum  vs.  CaliberCos Class A

Ethereum

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ethereum are ranked lower than 9 (%) 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.

CaliberCos Class A

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CaliberCos Class A has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, CaliberCos is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Ethereum and CaliberCos

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

The idea behind Ethereum and CaliberCos Class A 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.