Correlation Between Ethereum and Homerun Resources
Can any of the company-specific risk be diversified away by investing in both Ethereum and Homerun Resources 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 Homerun Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ethereum and Homerun Resources, you can compare the effects of market volatilities on Ethereum and Homerun Resources 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 Homerun Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ethereum and Homerun Resources.
Diversification Opportunities for Ethereum and Homerun Resources
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ethereum and Homerun is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Ethereum and Homerun Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Homerun Resources 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 Homerun Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Homerun Resources has no effect on the direction of Ethereum i.e., Ethereum and Homerun Resources go up and down completely randomly.
Pair Corralation between Ethereum and Homerun Resources
Assuming the 90 days trading horizon Ethereum is expected to generate 8.69 times less return on investment than Homerun Resources. But when comparing it to its historical volatility, Ethereum is 1.58 times less risky than Homerun Resources. It trades about 0.02 of its potential returns per unit of risk. Homerun Resources is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 71.00 in Homerun Resources on October 9, 2024 and sell it today you would earn a total of 55.00 from holding Homerun Resources or generate 77.46% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 99.39% |
Values | Daily Returns |
Ethereum vs. Homerun Resources
Performance |
Timeline |
Ethereum |
Homerun Resources |
Ethereum and Homerun Resources Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ethereum and Homerun Resources
The main advantage of trading using opposite Ethereum and Homerun Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ethereum position performs unexpectedly, Homerun Resources 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 Homerun Resources will offset losses from the drop in Homerun Resources' long position.The idea behind Ethereum and Homerun Resources 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.Homerun Resources vs. TUT Fitness Group | Homerun Resources vs. CVS HEALTH CDR | Homerun Resources vs. Andlauer Healthcare Gr | Homerun Resources vs. NextSource Materials |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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