Correlation Between Ethereum and Hinterland Metals

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

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

Diversification Opportunities for Ethereum and Hinterland Metals

0.0

Correlation Coefficient

Ethereum  Hinterland Metals

Pay attention - limited upside

The 3 months correlation between Ethereum and Hinterland is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ethereum and Hinterland Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hinterland Metals 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 Hinterland Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hinterland Metals has no effect on the direction of Ethereum i.e., Ethereum and Hinterland Metals go up and down completely randomly.

Pair Corralation between Ethereum and Hinterland Metals

If you would invest (100.00) in Hinterland Metals on December 22, 2024 and sell it today you would earn a total of  100.00  from holding Hinterland Metals or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Ethereum  vs.  Hinterland Metals

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.

Hinterland Metals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hinterland Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong primary indicators, Hinterland Metals is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Ethereum and Hinterland Metals

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

The idea behind Ethereum and Hinterland Metals 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.