Correlation Between EigenLayer and Staked Ether
Can any of the company-specific risk be diversified away by investing in both EigenLayer 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 EigenLayer and Staked Ether into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EigenLayer and Staked Ether, you can compare the effects of market volatilities on EigenLayer 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 EigenLayer with a short position of Staked Ether. Check out your portfolio center. Please also check ongoing floating volatility patterns of EigenLayer and Staked Ether.
Diversification Opportunities for EigenLayer and Staked Ether
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between EigenLayer and Staked is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding EigenLayer and Staked Ether in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Staked Ether 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 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 EigenLayer i.e., EigenLayer and Staked Ether go up and down completely randomly.
Pair Corralation between EigenLayer and Staked Ether
Assuming the 90 days trading horizon EigenLayer is expected to under-perform the Staked Ether. In addition to that, EigenLayer is 1.99 times more volatile than Staked Ether. It trades about -0.16 of its total potential returns per unit of risk. Staked Ether is currently generating about 0.23 per unit of volatility. If you would invest 252,107 in Staked Ether on August 23, 2024 and sell it today you would earn a total of 54,635 from holding Staked Ether or generate 21.67% 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. Staked Ether
Performance |
| Timeline |
| EigenLayer |
| Staked Ether |
EigenLayer and Staked Ether Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EigenLayer and Staked Ether
The main advantage of trading using opposite EigenLayer and Staked Ether positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EigenLayer 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 EigenLayer 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |