Correlation Between BLZ and Ethereum PoW
Can any of the company-specific risk be diversified away by investing in both BLZ and Ethereum PoW 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 BLZ and Ethereum PoW into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BLZ and Ethereum PoW, you can compare the effects of market volatilities on BLZ and Ethereum PoW 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 BLZ with a short position of Ethereum PoW. Check out your portfolio center. Please also check ongoing floating volatility patterns of BLZ and Ethereum PoW.
Diversification Opportunities for BLZ and Ethereum PoW
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BLZ and Ethereum is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding BLZ and Ethereum PoW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ethereum PoW and BLZ 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 BLZ are associated (or correlated) with Ethereum PoW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ethereum PoW has no effect on the direction of BLZ i.e., BLZ and Ethereum PoW go up and down completely randomly.
Pair Corralation between BLZ and Ethereum PoW
Assuming the 90 days trading horizon BLZ is expected to generate 27.66 times less return on investment than Ethereum PoW. But when comparing it to its historical volatility, BLZ is 1.18 times less risky than Ethereum PoW. It trades about 0.01 of its potential returns per unit of risk. Ethereum PoW is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 229.00 in Ethereum PoW on August 26, 2024 and sell it today you would earn a total of 146.00 from holding Ethereum PoW or generate 63.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BLZ vs. Ethereum PoW
Performance |
| Timeline |
| BLZ |
| Ethereum PoW |
BLZ and Ethereum PoW Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BLZ and Ethereum PoW
The main advantage of trading using opposite BLZ and Ethereum PoW positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BLZ position performs unexpectedly, Ethereum PoW 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 PoW will offset losses from the drop in Ethereum PoW's long position.The idea behind BLZ and Ethereum PoW 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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