Correlation Between DENT and Staked Ether
Can any of the company-specific risk be diversified away by investing in both DENT 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 DENT and Staked Ether into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DENT and Staked Ether, you can compare the effects of market volatilities on DENT 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 DENT with a short position of Staked Ether. Check out your portfolio center. Please also check ongoing floating volatility patterns of DENT and Staked Ether.
Diversification Opportunities for DENT and Staked Ether
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between DENT and Staked is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding DENT and Staked Ether in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Staked Ether and DENT 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 DENT 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 DENT i.e., DENT and Staked Ether go up and down completely randomly.
Pair Corralation between DENT and Staked Ether
Assuming the 90 days trading horizon DENT is expected to generate 1.13 times more return on investment than Staked Ether. However, DENT is 1.13 times more volatile than Staked Ether. It trades about 0.44 of its potential returns per unit of risk. Staked Ether is currently generating about 0.36 per unit of risk. If you would invest 0.08 in DENT on August 26, 2024 and sell it today you would earn a total of 0.05 from holding DENT or generate 55.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
DENT vs. Staked Ether
Performance |
| Timeline |
| DENT |
| Staked Ether |
DENT and Staked Ether Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DENT and Staked Ether
The main advantage of trading using opposite DENT and Staked Ether positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DENT 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 DENT 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |