Correlation Between Ethereum and SPECTRAL MEDICAL
Can any of the company-specific risk be diversified away by investing in both Ethereum and SPECTRAL MEDICAL 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 SPECTRAL MEDICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ethereum and SPECTRAL MEDICAL, you can compare the effects of market volatilities on Ethereum and SPECTRAL MEDICAL 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 SPECTRAL MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ethereum and SPECTRAL MEDICAL.
Diversification Opportunities for Ethereum and SPECTRAL MEDICAL
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ethereum and SPECTRAL is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Ethereum and SPECTRAL MEDICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPECTRAL MEDICAL 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 SPECTRAL MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPECTRAL MEDICAL has no effect on the direction of Ethereum i.e., Ethereum and SPECTRAL MEDICAL go up and down completely randomly.
Pair Corralation between Ethereum and SPECTRAL MEDICAL
Assuming the 90 days trading horizon Ethereum is expected to under-perform the SPECTRAL MEDICAL. In addition to that, Ethereum is 1.02 times more volatile than SPECTRAL MEDICAL. It trades about -0.23 of its total potential returns per unit of risk. SPECTRAL MEDICAL is currently generating about 0.26 per unit of volatility. If you would invest 32.00 in SPECTRAL MEDICAL on October 12, 2024 and sell it today you would earn a total of 5.00 from holding SPECTRAL MEDICAL or generate 15.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 80.95% |
| Values | Daily Returns |
Ethereum vs. SPECTRAL MEDICAL
Performance |
| Timeline |
| Ethereum |
| SPECTRAL MEDICAL |
Ethereum and SPECTRAL MEDICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ethereum and SPECTRAL MEDICAL
The main advantage of trading using opposite Ethereum and SPECTRAL MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ethereum position performs unexpectedly, SPECTRAL MEDICAL 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 SPECTRAL MEDICAL will offset losses from the drop in SPECTRAL MEDICAL's long position.The idea behind Ethereum and SPECTRAL MEDICAL 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.| SPECTRAL MEDICAL vs. Thermo Fisher Scientific | SPECTRAL MEDICAL vs. Danaher | SPECTRAL MEDICAL vs. Siemens Healthineers AG | SPECTRAL MEDICAL vs. Agilent Technologies |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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