Correlation Between BCPT and Staked Ether
Can any of the company-specific risk be diversified away by investing in both BCPT and Staked Ether 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 BCPT and Staked Ether into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BCPT and Staked Ether, you can compare the effects of market volatilities on BCPT and Staked Ether 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 BCPT with a short position of Staked Ether. Check out your portfolio center. Please also check ongoing floating volatility patterns of BCPT and Staked Ether.
Diversification Opportunities for BCPT and Staked Ether
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between BCPT and Staked is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding BCPT and Staked Ether in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Staked Ether and BCPT 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 BCPT are associated (or correlated) with Staked Ether. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Staked Ether has no effect on the direction of BCPT i.e., BCPT and Staked Ether go up and down completely randomly.
Pair Corralation between BCPT and Staked Ether
Assuming the 90 days trading horizon BCPT is expected to generate 0.95 times more return on investment than Staked Ether. However, BCPT is 1.05 times less risky than Staked Ether. It trades about 0.37 of its potential returns per unit of risk. Staked Ether is currently generating about 0.3 per unit of risk. If you would invest 0.22 in BCPT on August 27, 2024 and sell it today you would earn a total of 0.08 from holding BCPT or generate 34.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BCPT vs. Staked Ether
Performance |
| Timeline |
| BCPT |
| Staked Ether |
BCPT and Staked Ether Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BCPT and Staked Ether
The main advantage of trading using opposite BCPT and Staked Ether positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCPT position performs unexpectedly, Staked Ether 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 Staked Ether will offset losses from the drop in Staked Ether's long position.The idea behind BCPT and Staked Ether 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |