Correlation Between Ethereum and Retailing Fund

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

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

Diversification Opportunities for Ethereum and Retailing Fund

0.54

Correlation Coefficient

Ethereum  Retailing Fund

Very weak diversification

The 3 months correlation between Ethereum and Retailing is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Ethereum and Retailing Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retailing Fund Class 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 Retailing Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retailing Fund Class has no effect on the direction of Ethereum i.e., Ethereum and Retailing Fund go up and down completely randomly.

Pair Corralation between Ethereum and Retailing Fund

Assuming the 90 days trading horizon Ethereum is expected to under-perform the Retailing Fund. In addition to that, Ethereum is 3.69 times more volatile than Retailing Fund Class. It trades about -0.2 of its total potential returns per unit of risk. Retailing Fund Class is currently generating about -0.1 per unit of volatility. If you would invest  4,235  in Retailing Fund Class on December 23, 2024 and sell it today you would lose (279.00) from holding Retailing Fund Class or give up 6.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	93.85%
Values	Daily Returns

Ethereum  vs.  Retailing Fund Class

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.

Retailing Fund Class

Risk-Adjusted Performance

Very Weak

Over the last 90 days Retailing Fund Class has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Ethereum and Retailing Fund

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

The idea behind Ethereum and Retailing Fund Class 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 Transaction History module to view history of all your transactions and understand their impact on performance.