Correlation Between EigenLayer and Wrapped Beacon
Can any of the company-specific risk be diversified away by investing in both EigenLayer and Wrapped Beacon 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 Wrapped Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EigenLayer and Wrapped Beacon ETH, you can compare the effects of market volatilities on EigenLayer and Wrapped Beacon 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 Wrapped Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of EigenLayer and Wrapped Beacon.
Diversification Opportunities for EigenLayer and Wrapped Beacon
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EigenLayer and Wrapped is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding EigenLayer and Wrapped Beacon ETH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wrapped Beacon ETH 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 Wrapped Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wrapped Beacon ETH has no effect on the direction of EigenLayer i.e., EigenLayer and Wrapped Beacon go up and down completely randomly.
Pair Corralation between EigenLayer and Wrapped Beacon
Assuming the 90 days trading horizon EigenLayer is expected to under-perform the Wrapped Beacon. In addition to that, EigenLayer is 1.8 times more volatile than Wrapped Beacon ETH. It trades about -0.11 of its total potential returns per unit of risk. Wrapped Beacon ETH is currently generating about 0.01 per unit of volatility. If you would invest 352,424 in Wrapped Beacon ETH on October 26, 2024 and sell it today you would lose (2,619) from holding Wrapped Beacon ETH or give up 0.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EigenLayer vs. Wrapped Beacon ETH
Performance |
| Timeline |
| EigenLayer |
| Wrapped Beacon ETH |
EigenLayer and Wrapped Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EigenLayer and Wrapped Beacon
The main advantage of trading using opposite EigenLayer and Wrapped Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EigenLayer position performs unexpectedly, Wrapped Beacon 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 Wrapped Beacon will offset losses from the drop in Wrapped Beacon's long position.The idea behind EigenLayer and Wrapped Beacon ETH 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.| Wrapped Beacon vs. XRP | Wrapped Beacon vs. Solana | Wrapped Beacon vs. Sui | Wrapped Beacon vs. OFFICIAL TRUMP |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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