Correlation Between SNC and Staked Ether

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

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

Diversification Opportunities for SNC and Staked Ether

0.9

Correlation Coefficient

SNC  Staked Ether

Almost no diversification

The 3 months correlation between SNC and Staked is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding SNC and Staked Ether in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Staked Ether and SNC 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 SNC 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 SNC i.e., SNC and Staked Ether go up and down completely randomly.

Pair Corralation between SNC and Staked Ether

Assuming the 90 days trading horizon SNC is expected to under-perform the Staked Ether. But the crypto coin apears to be less risky and, when comparing its historical volatility, SNC is 1.01 times less risky than Staked Ether. The crypto coin trades about -0.04 of its potential returns per unit of risk. The Staked Ether is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  388,808  in Staked Ether on December 2, 2024 and sell it today you would lose (167,446) from holding Staked Ether or give up 43.07% of portfolio value over 90 days.

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

SNC  vs.  Staked Ether

SNC

Risk-Adjusted Performance

Very Weak

Over the last 90 days SNC 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 SNC 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 SNC and Staked Ether

The main advantage of trading using opposite SNC and Staked Ether positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SNC 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 SNC 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.