Correlation Between Ethereum and Safestore Holdings
Can any of the company-specific risk be diversified away by investing in both Ethereum and Safestore Holdings 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 Safestore Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ethereum and Safestore Holdings plc, you can compare the effects of market volatilities on Ethereum and Safestore Holdings 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 Safestore Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ethereum and Safestore Holdings.
Diversification Opportunities for Ethereum and Safestore Holdings
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ethereum and Safestore is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Ethereum and Safestore Holdings plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safestore Holdings 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 Safestore Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safestore Holdings plc has no effect on the direction of Ethereum i.e., Ethereum and Safestore Holdings go up and down completely randomly.
Pair Corralation between Ethereum and Safestore Holdings
Assuming the 90 days trading horizon Ethereum is expected to generate 3.32 times more return on investment than Safestore Holdings. However, Ethereum is 3.32 times more volatile than Safestore Holdings plc. It trades about 0.06 of its potential returns per unit of risk. Safestore Holdings plc is currently generating about -0.03 per unit of risk. If you would invest 165,095 in Ethereum on October 29, 2024 and sell it today you would earn a total of 152,116 from holding Ethereum or generate 92.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 59.68% |
| Values | Daily Returns |
Ethereum vs. Safestore Holdings plc
Performance |
| Timeline |
| Ethereum |
| Safestore Holdings plc |
Ethereum and Safestore Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ethereum and Safestore Holdings
The main advantage of trading using opposite Ethereum and Safestore Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ethereum position performs unexpectedly, Safestore Holdings 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 Safestore Holdings will offset losses from the drop in Safestore Holdings' long position.The idea behind Ethereum and Safestore Holdings 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.| Safestore Holdings vs. Magnachip Semiconductor | Safestore Holdings vs. Elmos Semiconductor SE | Safestore Holdings vs. Maple Leaf Foods | Safestore Holdings vs. PURE FOODS TASMANIA |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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