Correlation Between Ether Fund and Ether ETF

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

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

Diversification Opportunities for Ether Fund and Ether ETF

1.0

Correlation Coefficient

Ether Fund  Ether ETF

No risk reduction

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

Pair Corralation between Ether Fund and Ether ETF

Assuming the 90 days trading horizon Ether Fund is expected to generate 0.95 times more return on investment than Ether ETF. However, Ether Fund is 1.05 times less risky than Ether ETF. It trades about -0.16 of its potential returns per unit of risk. Ether ETF CAD is currently generating about -0.17 per unit of risk. If you would invest  7,600  in Ether Fund on December 28, 2024 and sell it today you would lose (2,929) from holding Ether Fund or give up 38.54% of portfolio value over 90 days.

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

Ether Fund  vs.  Ether ETF CAD

Ether Fund

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ether Fund has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Etf's technical indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

Ether ETF CAD

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ether ETF CAD has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Etf's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

Pair Trading with Ether Fund and Ether ETF

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

The idea behind Ether Fund and Ether ETF CAD 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.