Correlation Between Ethereum and Compass Group
Can any of the company-specific risk be diversified away by investing in both Ethereum and Compass Group 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 Compass Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ethereum and Compass Group PLC, you can compare the effects of market volatilities on Ethereum and Compass Group 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 Compass Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ethereum and Compass Group.
Diversification Opportunities for Ethereum and Compass Group
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ethereum and Compass is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Ethereum and Compass Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compass Group PLC 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 Compass Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compass Group PLC has no effect on the direction of Ethereum i.e., Ethereum and Compass Group go up and down completely randomly.
Pair Corralation between Ethereum and Compass Group
Assuming the 90 days trading horizon Ethereum is expected to generate 4.31 times more return on investment than Compass Group. However, Ethereum is 4.31 times more volatile than Compass Group PLC. It trades about 0.07 of its potential returns per unit of risk. Compass Group PLC is currently generating about 0.14 per unit of risk. If you would invest 333,738 in Ethereum on October 21, 2024 and sell it today you would earn a total of 13,983 from holding Ethereum or generate 4.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 90.48% |
| Values | Daily Returns |
Ethereum vs. Compass Group PLC
Performance |
| Timeline |
| Ethereum |
| Compass Group PLC |
Ethereum and Compass Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ethereum and Compass Group
The main advantage of trading using opposite Ethereum and Compass Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ethereum position performs unexpectedly, Compass Group 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 Compass Group will offset losses from the drop in Compass Group's long position.The idea behind Ethereum and Compass Group PLC 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.| Compass Group vs. MoneysupermarketCom Group PLC | Compass Group vs. Seraphim Space Investment | Compass Group vs. Beeks Trading | Compass Group vs. Supermarket Income REIT |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |