Correlation Between Staked Ether and APPC

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

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

Diversification Opportunities for Staked Ether and APPC

0.94

Correlation Coefficient

Staked Ether  APPC

Almost no diversification

The 3 months correlation between Staked and APPC is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Staked Ether and APPC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APPC and Staked Ether 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 Staked Ether are associated (or correlated) with APPC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APPC has no effect on the direction of Staked Ether i.e., Staked Ether and APPC go up and down completely randomly.

Pair Corralation between Staked Ether and APPC

Assuming the 90 days trading horizon Staked Ether is expected to generate 1.05 times more return on investment than APPC. However, Staked Ether is 1.05 times more volatile than APPC. It trades about 0.42 of its potential returns per unit of risk. APPC is currently generating about 0.37 per unit of risk. If you would invest  250,939  in Staked Ether on September 1, 2024 and sell it today you would earn a total of  119,646  from holding Staked Ether or generate 47.68% return on investment over 90 days.

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

Staked Ether  vs.  APPC

Staked Ether

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Staked Ether are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Staked Ether exhibited solid returns over the last few months and may actually be approaching a breakup point.

APPC

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in APPC are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, APPC exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Staked Ether and APPC

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

The idea behind Staked Ether and APPC 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.