Correlation Between Arweave and Ethereum Name
Can any of the company-specific risk be diversified away by investing in both Arweave and Ethereum Name 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 Arweave and Ethereum Name into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arweave and Ethereum Name Service, you can compare the effects of market volatilities on Arweave and Ethereum Name 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 Arweave with a short position of Ethereum Name. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arweave and Ethereum Name.
Diversification Opportunities for Arweave and Ethereum Name
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Arweave and Ethereum is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Arweave and Ethereum Name Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ethereum Name Service and Arweave 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 Arweave are associated (or correlated) with Ethereum Name. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ethereum Name Service has no effect on the direction of Arweave i.e., Arweave and Ethereum Name go up and down completely randomly.
Pair Corralation between Arweave and Ethereum Name
Assuming the 90 days horizon Arweave is expected to generate 3.23 times less return on investment than Ethereum Name. But when comparing it to its historical volatility, Arweave is 1.45 times less risky than Ethereum Name. It trades about 0.09 of its potential returns per unit of risk. Ethereum Name Service is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,662 in Ethereum Name Service on September 2, 2024 and sell it today you would earn a total of 2,373 from holding Ethereum Name Service or generate 142.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arweave vs. Ethereum Name Service
Performance |
| Timeline |
| Arweave |
| Ethereum Name Service |
Arweave and Ethereum Name Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arweave and Ethereum Name
The main advantage of trading using opposite Arweave and Ethereum Name positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arweave position performs unexpectedly, Ethereum Name 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 Ethereum Name will offset losses from the drop in Ethereum Name's long position.The idea behind Arweave and Ethereum Name Service 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.| Ethereum Name vs. Ethereum Classic | Ethereum Name vs. Ethereum PoW | Ethereum Name vs. Staked Ether | Ethereum Name vs. EigenLayer |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |