Correlation Between Ethereum PoW and Phala Network
Can any of the company-specific risk be diversified away by investing in both Ethereum PoW and Phala Network 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 PoW and Phala Network into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ethereum PoW and Phala Network, you can compare the effects of market volatilities on Ethereum PoW and Phala Network 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 PoW with a short position of Phala Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ethereum PoW and Phala Network.
Diversification Opportunities for Ethereum PoW and Phala Network
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ethereum and Phala is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Ethereum PoW and Phala Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phala Network and Ethereum PoW 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 PoW are associated (or correlated) with Phala Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phala Network has no effect on the direction of Ethereum PoW i.e., Ethereum PoW and Phala Network go up and down completely randomly.
Pair Corralation between Ethereum PoW and Phala Network
Assuming the 90 days trading horizon Ethereum PoW is expected to under-perform the Phala Network. But the crypto coin apears to be less risky and, when comparing its historical volatility, Ethereum PoW is 3.15 times less risky than Phala Network. The crypto coin trades about -0.16 of its potential returns per unit of risk. The Phala Network is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 18.00 in Phala Network on November 1, 2024 and sell it today you would earn a total of 2.00 from holding Phala Network or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ethereum PoW vs. Phala Network
Performance |
| Timeline |
| Ethereum PoW |
| Phala Network |
Ethereum PoW and Phala Network Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ethereum PoW and Phala Network
The main advantage of trading using opposite Ethereum PoW and Phala Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ethereum PoW position performs unexpectedly, Phala Network 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 Phala Network will offset losses from the drop in Phala Network's long position.| Ethereum PoW vs. Ethereum Classic | Ethereum PoW vs. Ethereum Name Service | Ethereum PoW vs. Staked Ether | Ethereum PoW vs. Phala Network |
| Phala Network vs. Staked Ether | Phala Network vs. EigenLayer | Phala Network vs. EOSDAC | Phala Network vs. BLZ |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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