Correlation Between Ethereum and Park National

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

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

Diversification Opportunities for Ethereum and Park National

0.51

Correlation Coefficient

Ethereum  Park National

Very weak diversification

The 3 months correlation between Ethereum and Park is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Ethereum and Park National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Park National 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 Park National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Park National has no effect on the direction of Ethereum i.e., Ethereum and Park National go up and down completely randomly.

Pair Corralation between Ethereum and Park National

Assuming the 90 days trading horizon Ethereum is expected to generate 1.42 times more return on investment than Park National. However, Ethereum is 1.42 times more volatile than Park National. It trades about 0.14 of its potential returns per unit of risk. Park National is currently generating about 0.0 per unit of risk. If you would invest  243,620  in Ethereum on October 24, 2024 and sell it today you would earn a total of  89,288  from holding Ethereum or generate 36.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Ethereum  vs.  Park National

Ethereum

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ethereum are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical indicators, Ethereum exhibited solid returns over the last few months and may actually be approaching a breakup point.

Park National

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Park National has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Park National is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Ethereum and Park National

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

The idea behind Ethereum and Park National 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.