Correlation Between Staked Ether and Orca

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

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

Diversification Opportunities for Staked Ether and Orca

0.77

Correlation Coefficient

Staked Ether  Orca

Poor diversification

The 3 months correlation between Staked and Orca is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Staked Ether and Orca in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orca 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 Orca. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orca has no effect on the direction of Staked Ether i.e., Staked Ether and Orca go up and down completely randomly.

Pair Corralation between Staked Ether and Orca

Assuming the 90 days trading horizon Staked Ether is expected to generate 0.32 times more return on investment than Orca. However, Staked Ether is 3.09 times less risky than Orca. It trades about -0.12 of its potential returns per unit of risk. Orca is currently generating about -0.04 per unit of risk. If you would invest  359,300  in Staked Ether on November 28, 2024 and sell it today you would lose (110,207) from holding Staked Ether or give up 30.67% of portfolio value over 90 days.

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

Staked Ether  vs.  Orca

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.

Orca

Risk-Adjusted Performance

Very Weak

Over the last 90 days Orca 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 Orca shareholders.

Pair Trading with Staked Ether and Orca

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

The idea behind Staked Ether and Orca 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.