Correlation Between Staked Ether and ULTRA

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

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

Diversification Opportunities for Staked Ether and ULTRA

0.66

Correlation Coefficient

Staked Ether  ULTRA

Poor diversification

The 3 months correlation between Staked and ULTRA is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Staked Ether and ULTRA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ULTRA 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 ULTRA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ULTRA has no effect on the direction of Staked Ether i.e., Staked Ether and ULTRA go up and down completely randomly.

Pair Corralation between Staked Ether and ULTRA

Assuming the 90 days trading horizon Staked Ether is expected to generate 0.47 times more return on investment than ULTRA. However, Staked Ether is 2.13 times less risky than ULTRA. It trades about 0.18 of its potential returns per unit of risk. ULTRA is currently generating about 0.08 per unit of risk. If you would invest  244,079  in Staked Ether on September 12, 2024 and sell it today you would earn a total of  118,596  from holding Staked Ether or generate 48.59% return on investment over 90 days.

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

Staked Ether  vs.  ULTRA

Staked Ether

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Staked Ether are ranked lower than 14 (%) 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.

ULTRA

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ULTRA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, ULTRA exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Staked Ether and ULTRA

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

The idea behind Staked Ether and ULTRA 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.