Correlation Between Financial and Ether Fund

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

By analyzing existing cross correlation between Financial 15 Split and Ether Fund, you can compare the effects of market volatilities on Financial 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 Financial with a short position of Ether Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Financial and Ether Fund.

Diversification Opportunities for Financial and Ether Fund

0.87

Correlation Coefficient

Financial  Ether Fund

Very poor diversification

The 3 months correlation between Financial and Ether is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Financial 15 Split and Ether Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ether Fund and Financial 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 Financial 15 Split 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 Financial i.e., Financial and Ether Fund go up and down completely randomly.

Pair Corralation between Financial and Ether Fund

Assuming the 90 days trading horizon Financial 15 Split is expected to under-perform the Ether Fund. But the etf apears to be less risky and, when comparing its historical volatility, Financial 15 Split is 3.0 times less risky than Ether Fund. The etf trades about -0.29 of its potential returns per unit of risk. The Ether Fund is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  7,525  in Ether Fund on September 24, 2024 and sell it today you would lose (10.00) from holding Ether Fund or give up 0.13% of portfolio value over 90 days.

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

Financial 15 Split  vs.  Ether Fund

Financial 15 Split

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Financial 15 Split are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Financial may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Ether Fund

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ether Fund are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical indicators, Ether Fund displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Financial and Ether Fund

The main advantage of trading using opposite Financial and Ether Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Financial 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 Financial 15 Split 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.