Correlation Between IShares Ethereum and Fidelity Advantage

Can any of the company-specific risk be diversified away by investing in both IShares Ethereum and Fidelity Advantage 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 Advantage 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 Advantage Ether, you can compare the effects of market volatilities on IShares Ethereum and Fidelity Advantage 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 Advantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Ethereum and Fidelity Advantage.

Diversification Opportunities for IShares Ethereum and Fidelity Advantage

1.0

Correlation Coefficient

IShares Ethereum  Fidelity Advantage

No risk reduction

The 3 months correlation between IShares and Fidelity is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding iShares Ethereum Trust and Fidelity Advantage Ether in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advantage Ether 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 Advantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Advantage Ether has no effect on the direction of IShares Ethereum i.e., IShares Ethereum and Fidelity Advantage go up and down completely randomly.

Pair Corralation between IShares Ethereum and Fidelity Advantage

Given the investment horizon of 90 days IShares Ethereum is expected to generate 1.0 times less return on investment than Fidelity Advantage. In addition to that, IShares Ethereum is 1.0 times more volatile than Fidelity Advantage Ether. It trades about 0.02 of its total potential returns per unit of risk. Fidelity Advantage Ether is currently generating about 0.02 per unit of volatility. If you would invest  3,466  in Fidelity Advantage Ether on September 28, 2024 and sell it today you would lose (130.00) from holding Fidelity Advantage Ether or give up 3.75% of portfolio value 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 Advantage Ether

iShares Ethereum Trust

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Ethereum Trust are ranked lower than 8 (%) 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 Advantage Ether

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advantage Ether are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Fidelity Advantage demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IShares Ethereum and Fidelity Advantage

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

The idea behind iShares Ethereum Trust and Fidelity Advantage Ether 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.