Correlation Between Grayscale Ethereum and 404280AH2

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Can any of the company-specific risk be diversified away by investing in both Grayscale Ethereum and 404280AH2 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 Grayscale Ethereum and 404280AH2 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grayscale Ethereum Mini and HSBC HLDGS PLC, you can compare the effects of market volatilities on Grayscale Ethereum and 404280AH2 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 Grayscale Ethereum with a short position of 404280AH2. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Ethereum and 404280AH2.

Diversification Opportunities for Grayscale Ethereum and 404280AH2

-0.38
  Correlation Coefficient

Very good diversification

The 3 months correlation between Grayscale and 404280AH2 is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Ethereum Mini and HSBC HLDGS PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HSBC HLDGS PLC and Grayscale 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 Grayscale Ethereum Mini are associated (or correlated) with 404280AH2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HSBC HLDGS PLC has no effect on the direction of Grayscale Ethereum i.e., Grayscale Ethereum and 404280AH2 go up and down completely randomly.

Pair Corralation between Grayscale Ethereum and 404280AH2

Considering the 90-day investment horizon Grayscale Ethereum Mini is expected to generate 2.6 times more return on investment than 404280AH2. However, Grayscale Ethereum is 2.6 times more volatile than HSBC HLDGS PLC. It trades about 0.05 of its potential returns per unit of risk. HSBC HLDGS PLC is currently generating about 0.05 per unit of risk. If you would invest  3,242  in Grayscale Ethereum Mini on October 21, 2024 and sell it today you would earn a total of  77.00  from holding Grayscale Ethereum Mini or generate 2.38% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy94.74%
ValuesDaily Returns

Grayscale Ethereum Mini  vs.  HSBC HLDGS PLC

 Performance 
       Timeline  
Grayscale Ethereum Mini 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Grayscale Ethereum Mini are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Grayscale Ethereum demonstrated solid returns over the last few months and may actually be approaching a breakup point.
HSBC HLDGS PLC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days HSBC HLDGS PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 404280AH2 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Grayscale Ethereum and 404280AH2 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Grayscale Ethereum and 404280AH2

The main advantage of trading using opposite Grayscale Ethereum and 404280AH2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Ethereum position performs unexpectedly, 404280AH2 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 404280AH2 will offset losses from the drop in 404280AH2's long position.
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The idea behind Grayscale Ethereum Mini and HSBC HLDGS 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.
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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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.

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