Correlation Between Ethereum PoW and Staked Ether
Can any of the company-specific risk be diversified away by investing in both Ethereum PoW and Staked Ether 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 Staked Ether into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ethereum PoW and Staked Ether, you can compare the effects of market volatilities on Ethereum PoW and Staked Ether 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 Staked Ether. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ethereum PoW and Staked Ether.
Diversification Opportunities for Ethereum PoW and Staked Ether
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ethereum and Staked is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Ethereum PoW and Staked Ether in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Staked Ether 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 Staked Ether. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Staked Ether has no effect on the direction of Ethereum PoW i.e., Ethereum PoW and Staked Ether go up and down completely randomly.
Pair Corralation between Ethereum PoW and Staked Ether
Assuming the 90 days trading horizon Ethereum PoW is expected to under-perform the Staked Ether. In addition to that, Ethereum PoW is 1.61 times more volatile than Staked Ether. It trades about -0.15 of its total potential returns per unit of risk. Staked Ether is currently generating about -0.02 per unit of volatility. If you would invest 335,127 in Staked Ether on November 1, 2024 and sell it today you would lose (10,460) from holding Staked Ether or give up 3.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ethereum PoW vs. Staked Ether
Performance |
| Timeline |
| Ethereum PoW |
| Staked Ether |
Ethereum PoW and Staked Ether Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ethereum PoW and Staked Ether
The main advantage of trading using opposite Ethereum PoW and Staked Ether positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ethereum PoW position performs unexpectedly, Staked Ether 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 Staked Ether will offset losses from the drop in Staked Ether's long position.| Ethereum PoW vs. Ethereum Classic | Ethereum PoW vs. Ethereum Name Service | Ethereum PoW vs. Staked Ether | Ethereum PoW vs. Phala Network |
| Staked Ether vs. Cronos | Staked Ether vs. Wrapped Bitcoin | Staked Ether vs. Monero | Staked Ether vs. Tether |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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