Correlation Between FTC and Staked Ether

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

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

Diversification Opportunities for FTC and Staked Ether

0.8

Correlation Coefficient

FTC  Staked Ether

Very poor diversification

The 3 months correlation between FTC and Staked is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding FTC and Staked Ether in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Staked Ether and FTC 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 FTC are associated (or correlated) with Staked Ether. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Staked Ether has no effect on the direction of FTC i.e., FTC and Staked Ether go up and down completely randomly.

Pair Corralation between FTC and Staked Ether

Assuming the 90 days trading horizon FTC is expected to generate 0.6 times more return on investment than Staked Ether. However, FTC is 1.66 times less risky than Staked Ether. It trades about -0.08 of its potential returns per unit of risk. Staked Ether is currently generating about -0.21 per unit of risk. If you would invest  0.28  in FTC on December 29, 2024 and sell it today you would lose (0.04) from holding FTC or give up 12.88% of portfolio value over 90 days.

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

FTC  vs.  Staked Ether

FTC

Risk-Adjusted Performance

Very Weak

Over the last 90 days FTC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Crypto's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for FTC shareholders.

Staked Ether

Risk-Adjusted Performance

Very Weak

Over the last 90 days Staked Ether 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 fundamental 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 Staked Ether shareholders.

Pair Trading with FTC and Staked Ether

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

The idea behind FTC and Staked 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.