Correlation Between Ethereum and EasyETF BNP

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

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

Diversification Opportunities for Ethereum and EasyETF BNP

0.71

Correlation Coefficient

Ethereum  EasyETF BNP

Poor diversification

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

Pair Corralation between Ethereum and EasyETF BNP

Assuming the 90 days trading horizon Ethereum is expected to under-perform the EasyETF BNP. In addition to that, Ethereum is 3.94 times more volatile than EasyETF BNP. It trades about -0.2 of its total potential returns per unit of risk. EasyETF BNP is currently generating about -0.13 per unit of volatility. If you would invest  2,858  in EasyETF BNP on December 22, 2024 and sell it today you would lose (242.00) from holding EasyETF BNP or give up 8.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.88%
Values	Daily Returns

Ethereum  vs.  EasyETF BNP

Ethereum

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ethereum has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's technical indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for Ethereum shareholders.

EasyETF BNP

Risk-Adjusted Performance

Very Weak

Over the last 90 days EasyETF BNP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Etf's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Pair Trading with Ethereum and EasyETF BNP

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

The idea behind Ethereum and EasyETF BNP 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 Valuation module to check real value of public entities based on technical and fundamental data.