Correlation Between Staked Ether and PHB

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Can any of the company-specific risk be diversified away by investing in both Staked Ether and PHB 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 PHB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Staked Ether and PHB, you can compare the effects of market volatilities on Staked Ether and PHB 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 PHB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Staked Ether and PHB.

Diversification Opportunities for Staked Ether and PHB

0.96
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Staked and PHB is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Staked Ether and PHB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHB 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 PHB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHB has no effect on the direction of Staked Ether i.e., Staked Ether and PHB go up and down completely randomly.

Pair Corralation between Staked Ether and PHB

Assuming the 90 days trading horizon Staked Ether is expected to generate 0.64 times more return on investment than PHB. However, Staked Ether is 1.56 times less risky than PHB. It trades about -0.19 of its potential returns per unit of risk. PHB is currently generating about -0.22 per unit of risk. If you would invest  332,948  in Staked Ether on December 29, 2024 and sell it today you would lose (143,131) from holding Staked Ether or give up 42.99% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Staked Ether  vs.  PHB

 Performance 
       Timeline  
Staked Ether 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
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.
PHB 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days PHB 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 drivers 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 PHB shareholders.

Staked Ether and PHB Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Staked Ether and PHB

The main advantage of trading using opposite Staked Ether and PHB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Staked Ether position performs unexpectedly, PHB 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 PHB will offset losses from the drop in PHB's long position.
The idea behind Staked Ether and PHB 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.

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