Correlation Between Ethereum and 14040HCF0

Can any of the company-specific risk be diversified away by investing in both Ethereum and 14040HCF0 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 14040HCF0 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ethereum and COF 395, you can compare the effects of market volatilities on Ethereum and 14040HCF0 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 14040HCF0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ethereum and 14040HCF0.

Diversification Opportunities for Ethereum and 14040HCF0

0.25

Correlation Coefficient

Ethereum  14040HCF0

Modest diversification

The 3 months correlation between Ethereum and 14040HCF0 is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Ethereum and COF 395 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 14040HCF0 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 14040HCF0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 14040HCF0 has no effect on the direction of Ethereum i.e., Ethereum and 14040HCF0 go up and down completely randomly.

Pair Corralation between Ethereum and 14040HCF0

Assuming the 90 days trading horizon Ethereum is expected to under-perform the 14040HCF0. In addition to that, Ethereum is 5.94 times more volatile than COF 395. It trades about -0.18 of its total potential returns per unit of risk. COF 395 is currently generating about -0.01 per unit of volatility. If you would invest  9,575  in COF 395 on December 26, 2024 and sell it today you would lose (40.00) from holding COF 395 or give up 0.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Ethereum  vs.  COF 395

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.

14040HCF0

Risk-Adjusted Performance

Very Weak

Over the last 90 days COF 395 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 14040HCF0 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ethereum and 14040HCF0

The main advantage of trading using opposite Ethereum and 14040HCF0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ethereum position performs unexpectedly, 14040HCF0 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 14040HCF0 will offset losses from the drop in 14040HCF0's long position.

The idea behind Ethereum and COF 395 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.

Check out your portfolio center.

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.