Correlation Between Ethereum and NUCOR
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By analyzing existing cross correlation between Ethereum and NUCOR P 52, you can compare the effects of market volatilities on Ethereum and NUCOR 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 NUCOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ethereum and NUCOR.
Diversification Opportunities for Ethereum and NUCOR
Very weak diversification
The 3 months correlation between Ethereum and NUCOR is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Ethereum and NUCOR P 52 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NUCOR P 52 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 NUCOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NUCOR P 52 has no effect on the direction of Ethereum i.e., Ethereum and NUCOR go up and down completely randomly.
Pair Corralation between Ethereum and NUCOR
Assuming the 90 days trading horizon Ethereum is expected to under-perform the NUCOR. In addition to that, Ethereum is 1.7 times more volatile than NUCOR P 52. It trades about -0.11 of its total potential returns per unit of risk. NUCOR P 52 is currently generating about 0.57 per unit of volatility. If you would invest 9,357 in NUCOR P 52 on November 2, 2024 and sell it today you would earn a total of 590.00 from holding NUCOR P 52 or generate 6.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 23.81% |
| Values | Daily Returns |
Ethereum vs. NUCOR P 52
Performance |
| Timeline |
| Ethereum |
| NUCOR P 52 |
Ethereum and NUCOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ethereum and NUCOR
The main advantage of trading using opposite Ethereum and NUCOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ethereum position performs unexpectedly, NUCOR 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 NUCOR will offset losses from the drop in NUCOR's long position.The idea behind Ethereum and NUCOR P 52 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.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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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