Correlation Between GAIA and Staked Ether
Can any of the company-specific risk be diversified away by investing in both GAIA 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 GAIA and Staked Ether into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GAIA and Staked Ether, you can compare the effects of market volatilities on GAIA 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 GAIA with a short position of Staked Ether. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAIA and Staked Ether.
Diversification Opportunities for GAIA and Staked Ether
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between GAIA and Staked is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding GAIA and Staked Ether in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Staked Ether and GAIA 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 GAIA 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 GAIA i.e., GAIA and Staked Ether go up and down completely randomly.
Pair Corralation between GAIA and Staked Ether
Assuming the 90 days trading horizon GAIA is expected to generate 3.45 times less return on investment than Staked Ether. In addition to that, GAIA is 2.58 times more volatile than Staked Ether. It trades about 0.05 of its total potential returns per unit of risk. Staked Ether is currently generating about 0.43 per unit of volatility. If you would invest 249,241 in Staked Ether on September 2, 2024 and sell it today you would earn a total of 121,344 from holding Staked Ether or generate 48.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GAIA vs. Staked Ether
Performance |
| Timeline |
| GAIA |
| Staked Ether |
GAIA and Staked Ether Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GAIA and Staked Ether
The main advantage of trading using opposite GAIA and Staked Ether positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAIA 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.The idea behind GAIA and Staked Ether 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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