Correlation Between Ethereum and Growth For

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

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

Diversification Opportunities for Ethereum and Growth For

-0.36

Correlation Coefficient

Ethereum  Growth For

Very good diversification

The 3 months correlation between Ethereum and Growth is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Ethereum and The Growth For in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth For 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 Growth For. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth For has no effect on the direction of Ethereum i.e., Ethereum and Growth For go up and down completely randomly.

Pair Corralation between Ethereum and Growth For

Assuming the 90 days trading horizon Ethereum is expected to generate 6.58 times less return on investment than Growth For. But when comparing it to its historical volatility, Ethereum is 3.12 times less risky than Growth For. It trades about 0.06 of its potential returns per unit of risk. The Growth For is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  7.01  in The Growth For on October 26, 2024 and sell it today you would earn a total of  2.99  from holding The Growth For or generate 42.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	21.48%
Values	Daily Returns

Ethereum  vs.  The Growth For

Ethereum

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ethereum are ranked lower than 8 (%) 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.

Growth For

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Growth For has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Growth For is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Ethereum and Growth For

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

The idea behind Ethereum and The Growth For 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.

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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.