Correlation Between Ethereum and NewFunds TRACI

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

By analyzing existing cross correlation between Ethereum and NewFunds TRACI 3, you can compare the effects of market volatilities on Ethereum and NewFunds TRACI 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 NewFunds TRACI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ethereum and NewFunds TRACI.

Diversification Opportunities for Ethereum and NewFunds TRACI

0.52

Correlation Coefficient

Ethereum  NewFunds TRACI

Very weak diversification

The 3 months correlation between Ethereum and NewFunds is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Ethereum and NewFunds TRACI 3 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewFunds TRACI 3 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 NewFunds TRACI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewFunds TRACI 3 has no effect on the direction of Ethereum i.e., Ethereum and NewFunds TRACI go up and down completely randomly.

Pair Corralation between Ethereum and NewFunds TRACI

Assuming the 90 days trading horizon Ethereum is expected to generate 11.92 times more return on investment than NewFunds TRACI. However, Ethereum is 11.92 times more volatile than NewFunds TRACI 3. It trades about 0.12 of its potential returns per unit of risk. NewFunds TRACI 3 is currently generating about 0.08 per unit of risk. If you would invest  247,970  in Ethereum on October 25, 2024 and sell it today you would earn a total of  77,356  from holding Ethereum or generate 31.2% return on investment over 90 days.

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

Ethereum  vs.  NewFunds TRACI 3

Ethereum

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ethereum are ranked lower than 9 (%) 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.

NewFunds TRACI 3

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in NewFunds TRACI 3 are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, NewFunds TRACI is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ethereum and NewFunds TRACI

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

The idea behind Ethereum and NewFunds TRACI 3 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.