Correlation Between EigenLayer and MWAT
Can any of the company-specific risk be diversified away by investing in both EigenLayer and MWAT 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 EigenLayer and MWAT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EigenLayer and MWAT, you can compare the effects of market volatilities on EigenLayer and MWAT 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 EigenLayer with a short position of MWAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of EigenLayer and MWAT.
Diversification Opportunities for EigenLayer and MWAT
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between EigenLayer and MWAT is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding EigenLayer and MWAT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MWAT and EigenLayer 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 EigenLayer are associated (or correlated) with MWAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MWAT has no effect on the direction of EigenLayer i.e., EigenLayer and MWAT go up and down completely randomly.
Pair Corralation between EigenLayer and MWAT
Assuming the 90 days trading horizon EigenLayer is expected to generate 15.05 times more return on investment than MWAT. However, EigenLayer is 15.05 times more volatile than MWAT. It trades about 0.04 of its potential returns per unit of risk. MWAT is currently generating about 0.13 per unit of risk. If you would invest 0.00 in EigenLayer on August 25, 2024 and sell it today you would earn a total of 258.00 from holding EigenLayer or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 32.23% |
| Values | Daily Returns |
EigenLayer vs. MWAT
Performance |
| Timeline |
| EigenLayer |
| MWAT |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
EigenLayer and MWAT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EigenLayer and MWAT
The main advantage of trading using opposite EigenLayer and MWAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EigenLayer position performs unexpectedly, MWAT 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 MWAT will offset losses from the drop in MWAT's long position.The idea behind EigenLayer and MWAT 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Stocks Directory Find actively traded stocks across global markets | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |