Correlation Between EigenLayer and Near
Can any of the company-specific risk be diversified away by investing in both EigenLayer and Near 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 Near into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EigenLayer and Near, you can compare the effects of market volatilities on EigenLayer and Near 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 Near. Check out your portfolio center. Please also check ongoing floating volatility patterns of EigenLayer and Near.
Diversification Opportunities for EigenLayer and Near
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between EigenLayer and Near is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding EigenLayer and Near in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Near 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 Near. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Near has no effect on the direction of EigenLayer i.e., EigenLayer and Near go up and down completely randomly.
Pair Corralation between EigenLayer and Near
Assuming the 90 days trading horizon EigenLayer is expected to under-perform the Near. In addition to that, EigenLayer is 1.5 times more volatile than Near. It trades about -0.06 of its total potential returns per unit of risk. Near is currently generating about 0.2 per unit of volatility. If you would invest 465.00 in Near on August 23, 2024 and sell it today you would earn a total of 120.00 from holding Near or generate 25.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EigenLayer vs. Near
Performance |
| Timeline |
| EigenLayer |
| Near |
EigenLayer and Near Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EigenLayer and Near
The main advantage of trading using opposite EigenLayer and Near positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EigenLayer position performs unexpectedly, Near 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 Near will offset losses from the drop in Near's long position.The idea behind EigenLayer and Near 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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