Correlation Between EigenLayer and XNK
Can any of the company-specific risk be diversified away by investing in both EigenLayer and XNK 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 XNK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EigenLayer and XNK, you can compare the effects of market volatilities on EigenLayer and XNK 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 XNK. Check out your portfolio center. Please also check ongoing floating volatility patterns of EigenLayer and XNK.
Diversification Opportunities for EigenLayer and XNK
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between EigenLayer and XNK is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding EigenLayer and XNK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XNK 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 XNK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XNK has no effect on the direction of EigenLayer i.e., EigenLayer and XNK go up and down completely randomly.
Pair Corralation between EigenLayer and XNK
Assuming the 90 days trading horizon EigenLayer is expected to generate 14.83 times more return on investment than XNK. However, EigenLayer is 14.83 times more volatile than XNK. It trades about 0.04 of its potential returns per unit of risk. XNK is currently generating about 0.09 per unit of risk. If you would invest 0.00 in EigenLayer on September 2, 2024 and sell it today you would earn a total of 363.00 from holding EigenLayer or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 31.26% |
| Values | Daily Returns |
EigenLayer vs. XNK
Performance |
| Timeline |
| EigenLayer |
| XNK |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
EigenLayer and XNK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EigenLayer and XNK
The main advantage of trading using opposite EigenLayer and XNK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EigenLayer position performs unexpectedly, XNK 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 XNK will offset losses from the drop in XNK's long position.The idea behind EigenLayer and XNK 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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