Correlation Between Ethereum and Senti Biosciences
Can any of the company-specific risk be diversified away by investing in both Ethereum and Senti Biosciences 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 Senti Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ethereum and Senti Biosciences, you can compare the effects of market volatilities on Ethereum and Senti Biosciences 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 Senti Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ethereum and Senti Biosciences.
Diversification Opportunities for Ethereum and Senti Biosciences
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ethereum and Senti is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Ethereum and Senti Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senti Biosciences 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 Senti Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senti Biosciences has no effect on the direction of Ethereum i.e., Ethereum and Senti Biosciences go up and down completely randomly.
Pair Corralation between Ethereum and Senti Biosciences
Assuming the 90 days trading horizon Ethereum is expected to generate 1.02 times less return on investment than Senti Biosciences. But when comparing it to its historical volatility, Ethereum is 2.64 times less risky than Senti Biosciences. It trades about 0.06 of its potential returns per unit of risk. Senti Biosciences is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,673 in Senti Biosciences on November 2, 2024 and sell it today you would lose (1,231) from holding Senti Biosciences or give up 73.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 60.32% |
| Values | Daily Returns |
Ethereum vs. Senti Biosciences
Performance |
| Timeline |
| Ethereum |
| Senti Biosciences |
Ethereum and Senti Biosciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ethereum and Senti Biosciences
The main advantage of trading using opposite Ethereum and Senti Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ethereum position performs unexpectedly, Senti Biosciences 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 Senti Biosciences will offset losses from the drop in Senti Biosciences' long position.| Ethereum vs. Ethereum Classic | Ethereum vs. Ethereum PoW | Ethereum vs. Ethereum Name Service | Ethereum vs. ORN |
| Senti Biosciences vs. Cadrenal Therapeutics, Common | Senti Biosciences vs. Foghorn Therapeutics | Senti Biosciences vs. Quoin Pharmaceuticals Ltd | Senti Biosciences vs. SAB Biotherapeutics |
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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