Correlation Between Decentralized Social and EigenLayer
Can any of the company-specific risk be diversified away by investing in both Decentralized Social and EigenLayer 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 Decentralized Social and EigenLayer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Decentralized Social and EigenLayer, you can compare the effects of market volatilities on Decentralized Social and EigenLayer 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 Decentralized Social with a short position of EigenLayer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Decentralized Social and EigenLayer.
Diversification Opportunities for Decentralized Social and EigenLayer
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Decentralized and EigenLayer is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Decentralized Social and EigenLayer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EigenLayer and Decentralized Social 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 Decentralized Social are associated (or correlated) with EigenLayer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EigenLayer has no effect on the direction of Decentralized Social i.e., Decentralized Social and EigenLayer go up and down completely randomly.
Pair Corralation between Decentralized Social and EigenLayer
Assuming the 90 days trading horizon Decentralized Social is expected to generate 3.24 times less return on investment than EigenLayer. But when comparing it to its historical volatility, Decentralized Social is 4.29 times less risky than EigenLayer. It trades about 0.04 of its potential returns per unit of risk. EigenLayer is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 284.00 in EigenLayer on November 9, 2024 and sell it today you would lose (113.00) from holding EigenLayer or give up 39.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Decentralized Social vs. EigenLayer
Performance |
| Timeline |
| Decentralized Social |
| EigenLayer |
Decentralized Social and EigenLayer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Decentralized Social and EigenLayer
The main advantage of trading using opposite Decentralized Social and EigenLayer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Decentralized Social position performs unexpectedly, EigenLayer 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 EigenLayer will offset losses from the drop in EigenLayer's long position.| Decentralized Social vs. Staked Ether | Decentralized Social vs. Phala Network | Decentralized Social vs. EigenLayer | Decentralized Social vs. EOSDAC |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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