Correlation Between EigenLayer and Wrapped EETH
Can any of the company-specific risk be diversified away by investing in both EigenLayer and Wrapped EETH 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 EETH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EigenLayer and Wrapped eETH, you can compare the effects of market volatilities on EigenLayer and Wrapped EETH 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 EETH. Check out your portfolio center. Please also check ongoing floating volatility patterns of EigenLayer and Wrapped EETH.
Diversification Opportunities for EigenLayer and Wrapped EETH
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EigenLayer and Wrapped is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding EigenLayer and Wrapped eETH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wrapped eETH 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 EETH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wrapped eETH has no effect on the direction of EigenLayer i.e., EigenLayer and Wrapped EETH go up and down completely randomly.
Pair Corralation between EigenLayer and Wrapped EETH
Assuming the 90 days trading horizon EigenLayer is expected to generate 1.38 times less return on investment than Wrapped EETH. But when comparing it to its historical volatility, EigenLayer is 1.18 times less risky than Wrapped EETH. It trades about 0.06 of its potential returns per unit of risk. Wrapped eETH is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Wrapped eETH on November 3, 2024 and sell it today you would earn a total of 347,666 from holding Wrapped eETH or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 71.6% |
| Values | Daily Returns |
EigenLayer vs. Wrapped eETH
Performance |
| Timeline |
| EigenLayer |
| Wrapped eETH |
EigenLayer and Wrapped EETH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EigenLayer and Wrapped EETH
The main advantage of trading using opposite EigenLayer and Wrapped EETH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EigenLayer position performs unexpectedly, Wrapped EETH 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 EETH will offset losses from the drop in Wrapped EETH's long position.The idea behind EigenLayer and Wrapped eETH 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 EETH vs. Wrapped Beacon ETH | Wrapped EETH vs. Staked Ether | Wrapped EETH vs. Phala Network | Wrapped EETH vs. EigenLayer |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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