Correlation Between Conflux Network and Ethereum
Can any of the company-specific risk be diversified away by investing in both Conflux Network and 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 Conflux Network and Ethereum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Conflux Network and Ethereum, you can compare the effects of market volatilities on Conflux Network and 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 Conflux Network with a short position of Ethereum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Conflux Network and Ethereum.
Diversification Opportunities for Conflux Network and Ethereum
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Conflux and Ethereum is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Conflux Network and Ethereum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ethereum and Conflux Network 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 Conflux Network are associated (or correlated) with Ethereum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ethereum has no effect on the direction of Conflux Network i.e., Conflux Network and Ethereum go up and down completely randomly.
Pair Corralation between Conflux Network and Ethereum
Assuming the 90 days trading horizon Conflux Network is expected to generate 1.62 times more return on investment than Ethereum. However, Conflux Network is 1.62 times more volatile than Ethereum. It trades about 0.15 of its potential returns per unit of risk. Ethereum is currently generating about 0.19 per unit of risk. If you would invest 13.00 in Conflux Network on September 2, 2024 and sell it today you would earn a total of 8.00 from holding Conflux Network or generate 61.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Conflux Network vs. Ethereum
Performance |
| Timeline |
| Conflux Network |
| Ethereum |
Conflux Network and Ethereum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Conflux Network and Ethereum
The main advantage of trading using opposite Conflux Network and Ethereum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Conflux Network position performs unexpectedly, 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 Ethereum will offset losses from the drop in Ethereum's long position.| Conflux Network vs. Staked Ether | Conflux Network vs. EigenLayer | Conflux Network vs. EOSDAC | Conflux Network vs. BLZ |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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