Correlation Between Ethereum and Humbl

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

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

Diversification Opportunities for Ethereum and Humbl

0.86

Correlation Coefficient

Ethereum  Humbl

Very poor diversification

The 3 months correlation between Ethereum and Humbl is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Ethereum and Humbl Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humbl Inc 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 Humbl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humbl Inc has no effect on the direction of Ethereum i.e., Ethereum and Humbl go up and down completely randomly.

Pair Corralation between Ethereum and Humbl

Assuming the 90 days trading horizon Ethereum is expected to generate 0.4 times more return on investment than Humbl. However, Ethereum is 2.51 times less risky than Humbl. It trades about -0.18 of its potential returns per unit of risk. Humbl Inc is currently generating about -0.09 per unit of risk. If you would invest  349,108  in Ethereum on December 21, 2024 and sell it today you would lose (143,529) from holding Ethereum or give up 41.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	93.65%
Values	Daily Returns

Ethereum  vs.  Humbl Inc

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.

Humbl Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Humbl Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Ethereum and Humbl

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

The idea behind Ethereum and Humbl Inc 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.