Correlation Between Ethereum and PTL

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

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

Diversification Opportunities for Ethereum and PTL

0.13

Correlation Coefficient

Ethereum  PTL

Average diversification

The 3 months correlation between Ethereum and PTL is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Ethereum and PTL LTD Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTL LTD Ordinary 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 PTL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTL LTD Ordinary has no effect on the direction of Ethereum i.e., Ethereum and PTL go up and down completely randomly.

Pair Corralation between Ethereum and PTL

Assuming the 90 days trading horizon Ethereum is expected to generate 6.25 times less return on investment than PTL. But when comparing it to its historical volatility, Ethereum is 1.7 times less risky than PTL. It trades about 0.06 of its potential returns per unit of risk. PTL LTD Ordinary is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  407.00  in PTL LTD Ordinary on October 11, 2024 and sell it today you would earn a total of  798.50  from holding PTL LTD Ordinary or generate 196.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	19.87%
Values	Daily Returns

Ethereum  vs.  PTL LTD Ordinary

Ethereum

Risk-Adjusted Performance

10 of 100

Good

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.

PTL LTD Ordinary

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in PTL LTD Ordinary are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating essential indicators, PTL exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ethereum and PTL

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

The idea behind Ethereum and PTL LTD Ordinary 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.