Correlation Between Vanguard and 21Shares Ethereum

Can any of the company-specific risk be diversified away by investing in both Vanguard and 21Shares Ethereum 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 Vanguard and 21Shares Ethereum into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vanguard SP 500 and 21Shares Ethereum Staking, you can compare the effects of market volatilities on Vanguard and 21Shares Ethereum 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 Vanguard with a short position of 21Shares Ethereum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard and 21Shares Ethereum.

Diversification Opportunities for Vanguard and 21Shares Ethereum

0.92

Correlation Coefficient

Vanguard  21Shares Ethereum

Almost no diversification

The 3 months correlation between Vanguard and 21Shares is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard SP 500 and 21Shares Ethereum Staking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 21Shares Ethereum Staking and Vanguard 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 Vanguard SP 500 are associated (or correlated) with 21Shares Ethereum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 21Shares Ethereum Staking has no effect on the direction of Vanguard i.e., Vanguard and 21Shares Ethereum go up and down completely randomly.

Pair Corralation between Vanguard and 21Shares Ethereum

Assuming the 90 days trading horizon Vanguard SP 500 is expected to generate 0.15 times more return on investment than 21Shares Ethereum. However, Vanguard SP 500 is 6.67 times less risky than 21Shares Ethereum. It trades about 0.21 of its potential returns per unit of risk. 21Shares Ethereum Staking is currently generating about -0.02 per unit of risk. If you would invest  10,088  in Vanguard SP 500 on October 9, 2024 and sell it today you would earn a total of  222.00  from holding Vanguard SP 500 or generate 2.2% return on investment over 90 days.

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

Vanguard SP 500  vs.  21Shares Ethereum Staking

Vanguard SP 500

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Vanguard SP 500 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly abnormal basic indicators, Vanguard may actually be approaching a critical reversion point that can send shares even higher in February 2025.

21Shares Ethereum Staking

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days 21Shares Ethereum Staking has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively weak basic indicators, 21Shares Ethereum unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vanguard and 21Shares Ethereum

The main advantage of trading using opposite Vanguard and 21Shares Ethereum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard position performs unexpectedly, 21Shares Ethereum 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 21Shares Ethereum will offset losses from the drop in 21Shares Ethereum's long position.

The idea behind Vanguard SP 500 and 21Shares Ethereum Staking 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.