Correlation Between Ethereum and Goldstone Technologies

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

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

Diversification Opportunities for Ethereum and Goldstone Technologies

0.64

Correlation Coefficient

Ethereum  Goldstone Technologies

Poor diversification

The 3 months correlation between Ethereum and Goldstone is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Ethereum and Goldstone Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldstone Technologies 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 Goldstone Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldstone Technologies has no effect on the direction of Ethereum i.e., Ethereum and Goldstone Technologies go up and down completely randomly.

Pair Corralation between Ethereum and Goldstone Technologies

Assuming the 90 days trading horizon Ethereum is expected to under-perform the Goldstone Technologies. But the crypto coin apears to be less risky and, when comparing its historical volatility, Ethereum is 1.39 times less risky than Goldstone Technologies. The crypto coin trades about -0.18 of its potential returns per unit of risk. The Goldstone Technologies Limited is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  8,210  in Goldstone Technologies Limited on December 26, 2024 and sell it today you would lose (1,993) from holding Goldstone Technologies Limited or give up 24.28% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.83%
Values	Daily Returns

Ethereum  vs.  Goldstone Technologies Limited

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.

Goldstone Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Goldstone Technologies Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental 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 the firm shareholders.

Pair Trading with Ethereum and Goldstone Technologies

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

The idea behind Ethereum and Goldstone Technologies Limited 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.