Correlation Between Ethereum and Highpeak Energy

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

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

Diversification Opportunities for Ethereum and Highpeak Energy

0.87

Correlation Coefficient

Ethereum  Highpeak Energy

Very poor diversification

The 3 months correlation between Ethereum and Highpeak is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Ethereum and Highpeak Energy Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highpeak Energy Acqu 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 Highpeak Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highpeak Energy Acqu has no effect on the direction of Ethereum i.e., Ethereum and Highpeak Energy go up and down completely randomly.

Pair Corralation between Ethereum and Highpeak Energy

Assuming the 90 days trading horizon Ethereum is expected to under-perform the Highpeak Energy. In addition to that, Ethereum is 1.53 times more volatile than Highpeak Energy Acquisition. It trades about -0.2 of its total potential returns per unit of risk. Highpeak Energy Acquisition is currently generating about -0.08 per unit of volatility. If you would invest  1,437  in Highpeak Energy Acquisition on December 22, 2024 and sell it today you would lose (190.00) from holding Highpeak Energy Acquisition or give up 13.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	93.75%
Values	Daily Returns

Ethereum  vs.  Highpeak Energy Acquisition

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.

Highpeak Energy Acqu

Risk-Adjusted Performance

Very Weak

Over the last 90 days Highpeak Energy Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's basic indicators 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 Highpeak Energy

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

The idea behind Ethereum and Highpeak Energy Acquisition 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.