Correlation Between Ethereum Classic and Ethereum
Can any of the company-specific risk be diversified away by investing in both Ethereum Classic and Ethereum 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 Ethereum Classic and Ethereum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ethereum Classic and Ethereum, you can compare the effects of market volatilities on Ethereum Classic and Ethereum 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 Ethereum Classic with a short position of Ethereum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ethereum Classic and Ethereum.
Diversification Opportunities for Ethereum Classic and Ethereum
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ethereum and Ethereum is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Ethereum Classic and Ethereum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ethereum and Ethereum Classic 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 Ethereum Classic are associated (or correlated) with Ethereum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ethereum has no effect on the direction of Ethereum Classic i.e., Ethereum Classic and Ethereum go up and down completely randomly.
Pair Corralation between Ethereum Classic and Ethereum
Assuming the 90 days trading horizon Ethereum Classic is expected to generate 1.13 times more return on investment than Ethereum. However, Ethereum Classic is 1.13 times more volatile than Ethereum. It trades about 0.48 of its potential returns per unit of risk. Ethereum is currently generating about 0.35 per unit of risk. If you would invest 1,820 in Ethereum Classic on August 26, 2024 and sell it today you would earn a total of 1,144 from holding Ethereum Classic or generate 62.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ethereum Classic vs. Ethereum
Performance |
| Timeline |
| Ethereum Classic |
| Ethereum |
Ethereum Classic and Ethereum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ethereum Classic and Ethereum
The main advantage of trading using opposite Ethereum Classic and Ethereum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ethereum Classic position performs unexpectedly, Ethereum 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 Ethereum will offset losses from the drop in Ethereum's long position.| Ethereum Classic vs. Ethereum PoW | Ethereum Classic vs. Ethereum Name Service | Ethereum Classic vs. Staked Ether | Ethereum Classic 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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