Correlation Between Ethereum and Lungyen Life
Can any of the company-specific risk be diversified away by investing in both Ethereum and Lungyen Life 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 Lungyen Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ethereum and Lungyen Life Service, you can compare the effects of market volatilities on Ethereum and Lungyen Life 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 Lungyen Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ethereum and Lungyen Life.
Diversification Opportunities for Ethereum and Lungyen Life
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ethereum and Lungyen is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Ethereum and Lungyen Life Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lungyen Life Service 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 Lungyen Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lungyen Life Service has no effect on the direction of Ethereum i.e., Ethereum and Lungyen Life go up and down completely randomly.
Pair Corralation between Ethereum and Lungyen Life
Assuming the 90 days trading horizon Ethereum is expected to under-perform the Lungyen Life. In addition to that, Ethereum is 2.63 times more volatile than Lungyen Life Service. It trades about -0.19 of its total potential returns per unit of risk. Lungyen Life Service is currently generating about -0.18 per unit of volatility. If you would invest 5,580 in Lungyen Life Service on October 14, 2024 and sell it today you would lose (300.00) from holding Lungyen Life Service or give up 5.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ethereum vs. Lungyen Life Service
Performance |
| Timeline |
| Ethereum |
| Lungyen Life Service |
Ethereum and Lungyen Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ethereum and Lungyen Life
The main advantage of trading using opposite Ethereum and Lungyen Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ethereum position performs unexpectedly, Lungyen Life 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 Lungyen Life will offset losses from the drop in Lungyen Life's long position.The idea behind Ethereum and Lungyen Life Service 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.| Lungyen Life vs. Da Lue International | Lungyen Life vs. Foxconn Technology Co | Lungyen Life vs. Fubon Financial Holding | Lungyen Life vs. YuantaP shares Taiwan Top |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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