Correlation Between Ethena USDe and Ethena

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

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

Diversification Opportunities for Ethena USDe and Ethena

0.07

Correlation Coefficient

Ethena USDe  Ethena

Significant diversification

The 3 months correlation between Ethena and Ethena is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Ethena USDe and Ethena in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ethena and Ethena USDe 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 Ethena USDe are associated (or correlated) with Ethena. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ethena has no effect on the direction of Ethena USDe i.e., Ethena USDe and Ethena go up and down completely randomly.

Pair Corralation between Ethena USDe and Ethena

Assuming the 90 days trading horizon Ethena USDe is expected to generate 0.02 times more return on investment than Ethena. However, Ethena USDe is 49.65 times less risky than Ethena. It trades about 0.0 of its potential returns per unit of risk. Ethena is currently generating about -0.12 per unit of risk. If you would invest  100.00  in Ethena USDe on December 30, 2024 and sell it today you would earn a total of  0.00  from holding Ethena USDe or generate 0.0% return on investment over 90 days.

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

Ethena USDe  vs.  Ethena

Ethena USDe

Risk-Adjusted Performance

Very Weak

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

Ethena

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ethena 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 basic 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 Ethena shareholders.

Pair Trading with Ethena USDe and Ethena

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

The idea behind Ethena USDe and Ethena 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.