Correlation Between IShares Ethereum and Fidelity Wise

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

By analyzing existing cross correlation between iShares Ethereum Trust and Fidelity Wise Origin, you can compare the effects of market volatilities on IShares Ethereum and Fidelity Wise 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 IShares Ethereum with a short position of Fidelity Wise. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Ethereum and Fidelity Wise.

Diversification Opportunities for IShares Ethereum and Fidelity Wise

0.93

Correlation Coefficient

IShares Ethereum  Fidelity Wise

Almost no diversification

The 3 months correlation between IShares and Fidelity is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding iShares Ethereum Trust and Fidelity Wise Origin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Wise Origin and IShares 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 iShares Ethereum Trust are associated (or correlated) with Fidelity Wise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Wise Origin has no effect on the direction of IShares Ethereum i.e., IShares Ethereum and Fidelity Wise go up and down completely randomly.

Pair Corralation between IShares Ethereum and Fidelity Wise

Given the investment horizon of 90 days IShares Ethereum is expected to generate 2.59 times less return on investment than Fidelity Wise. In addition to that, IShares Ethereum is 1.32 times more volatile than Fidelity Wise Origin. It trades about 0.07 of its total potential returns per unit of risk. Fidelity Wise Origin is currently generating about 0.23 per unit of volatility. If you would invest  8,116  in Fidelity Wise Origin on October 22, 2024 and sell it today you would earn a total of  1,050  from holding Fidelity Wise Origin or generate 12.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

iShares Ethereum Trust  vs.  Fidelity Wise Origin

iShares Ethereum Trust

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Ethereum Trust are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent technical indicators, IShares Ethereum sustained solid returns over the last few months and may actually be approaching a breakup point.

Fidelity Wise Origin

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Wise Origin are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Fidelity Wise exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IShares Ethereum and Fidelity Wise

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

The idea behind iShares Ethereum Trust and Fidelity Wise Origin 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.