Correlation Between Ethereum and SGA Solutions
Can any of the company-specific risk be diversified away by investing in both Ethereum and SGA Solutions 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 and SGA Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ethereum and SGA Solutions CoLtd, you can compare the effects of market volatilities on Ethereum and SGA Solutions 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 with a short position of SGA Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ethereum and SGA Solutions.
Diversification Opportunities for Ethereum and SGA Solutions
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ethereum and SGA is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Ethereum and SGA Solutions CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SGA Solutions CoLtd and Ethereum 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 are associated (or correlated) with SGA Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SGA Solutions CoLtd has no effect on the direction of Ethereum i.e., Ethereum and SGA Solutions go up and down completely randomly.
Pair Corralation between Ethereum and SGA Solutions
Assuming the 90 days trading horizon Ethereum is expected to generate 1.47 times more return on investment than SGA Solutions. However, Ethereum is 1.47 times more volatile than SGA Solutions CoLtd. It trades about 0.04 of its potential returns per unit of risk. SGA Solutions CoLtd is currently generating about 0.03 per unit of risk. If you would invest 311,210 in Ethereum on October 17, 2024 and sell it today you would earn a total of 10,605 from holding Ethereum or generate 3.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.12% |
| Values | Daily Returns |
Ethereum vs. SGA Solutions CoLtd
Performance |
| Timeline |
| Ethereum |
| SGA Solutions CoLtd |
Ethereum and SGA Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ethereum and SGA Solutions
The main advantage of trading using opposite Ethereum and SGA Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ethereum position performs unexpectedly, SGA Solutions 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 SGA Solutions will offset losses from the drop in SGA Solutions' long position.The idea behind Ethereum and SGA Solutions CoLtd 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.| SGA Solutions vs. KMH Hitech Co | SGA Solutions vs. GemVaxKAEL CoLtd | SGA Solutions vs. Bosung Power Technology | SGA Solutions vs. Busan Industrial Co |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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