Correlation Between Staked Ether and FXP

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

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

Diversification Opportunities for Staked Ether and FXP

0.0

Correlation Coefficient

Staked Ether  FXP

Pay attention - limited upside

The 3 months correlation between Staked and FXP is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Staked Ether and FXP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FXP 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 FXP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FXP has no effect on the direction of Staked Ether i.e., Staked Ether and FXP go up and down completely randomly.

Pair Corralation between Staked Ether and FXP

If you would invest (100.00) in FXP on November 27, 2024 and sell it today you would earn a total of  100.00  from holding FXP or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Staked Ether  vs.  FXP

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 March 2025. The latest tumult may also be a sign of longer-term up-swing for Staked Ether shareholders.

FXP

Risk-Adjusted Performance

Very Weak

Over the last 90 days FXP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, FXP is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Staked Ether and FXP

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

The idea behind Staked Ether and FXP 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.

Check out your portfolio center.

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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.