Correlation Between Ethereum and Iberdrola
Can any of the company-specific risk be diversified away by investing in both Ethereum and Iberdrola 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 Iberdrola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ethereum and Iberdrola SA, you can compare the effects of market volatilities on Ethereum and Iberdrola 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 Iberdrola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ethereum and Iberdrola.
Diversification Opportunities for Ethereum and Iberdrola
Excellent diversification
The 3 months correlation between Ethereum and Iberdrola is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Ethereum and Iberdrola SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iberdrola SA 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 Iberdrola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iberdrola SA has no effect on the direction of Ethereum i.e., Ethereum and Iberdrola go up and down completely randomly.
Pair Corralation between Ethereum and Iberdrola
Assuming the 90 days trading horizon Ethereum is expected to generate 5.29 times more return on investment than Iberdrola. However, Ethereum is 5.29 times more volatile than Iberdrola SA. It trades about 0.06 of its potential returns per unit of risk. Iberdrola SA is currently generating about 0.06 per unit of risk. If you would invest 155,614 in Ethereum on November 2, 2024 and sell it today you would earn a total of 170,201 from holding Ethereum or generate 109.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 60.45% |
| Values | Daily Returns |
Ethereum vs. Iberdrola SA
Performance |
| Timeline |
| Ethereum |
| Iberdrola SA |
Ethereum and Iberdrola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ethereum and Iberdrola
The main advantage of trading using opposite Ethereum and Iberdrola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ethereum position performs unexpectedly, Iberdrola 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 Iberdrola will offset losses from the drop in Iberdrola's long position.| Ethereum vs. Ethereum Classic | Ethereum vs. Ethereum PoW | Ethereum vs. Ethereum Name Service | Ethereum vs. ORN |
| Iberdrola vs. EDP Energias de | Iberdrola vs. ENEL Societa per | Iberdrola vs. Engie SA ADR | Iberdrola vs. RWE AG PK |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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