Correlation Between Ether ETF and Ether Fund

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

By analyzing existing cross correlation between Ether ETF CAD and Ether Fund, you can compare the effects of market volatilities on Ether ETF and Ether 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 Ether ETF with a short position of Ether Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ether ETF and Ether Fund.

Diversification Opportunities for Ether ETF and Ether Fund

0.88

Correlation Coefficient

Ether ETF  Ether Fund

Very poor diversification

The 3 months correlation between Ether and Ether is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Ether ETF CAD and Ether Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ether Fund and Ether ETF 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 Ether ETF CAD are associated (or correlated) with Ether Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ether Fund has no effect on the direction of Ether ETF i.e., Ether ETF and Ether Fund go up and down completely randomly.

Pair Corralation between Ether ETF and Ether Fund

Assuming the 90 days trading horizon Ether ETF CAD is expected to generate 0.99 times more return on investment than Ether Fund. However, Ether ETF CAD is 1.01 times less risky than Ether Fund. It trades about 0.02 of its potential returns per unit of risk. Ether Fund is currently generating about -0.02 per unit of risk. If you would invest  1,660  in Ether ETF CAD on September 25, 2024 and sell it today you would lose (4.00) from holding Ether ETF CAD or give up 0.24% of portfolio value over 90 days.

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

Ether ETF CAD  vs.  Ether Fund

Ether ETF CAD

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ether ETF CAD are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Ether ETF displayed solid returns over the last few months and may actually be approaching a breakup point.

Ether Fund

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ether Fund are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Ether Fund sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ether ETF and Ether Fund

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

The idea behind Ether ETF CAD and Ether Fund 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.