Correlation Between SPACE and Staked Ether
Can any of the company-specific risk be diversified away by investing in both SPACE 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 SPACE and Staked Ether into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPACE and Staked Ether, you can compare the effects of market volatilities on SPACE 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 SPACE with a short position of Staked Ether. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPACE and Staked Ether.
Diversification Opportunities for SPACE and Staked Ether
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SPACE and Staked is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding SPACE and Staked Ether in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Staked Ether and SPACE 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 SPACE 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 SPACE i.e., SPACE and Staked Ether go up and down completely randomly.
Pair Corralation between SPACE and Staked Ether
Assuming the 90 days horizon SPACE is expected to under-perform the Staked Ether. In addition to that, SPACE is 1.42 times more volatile than Staked Ether. It trades about -0.04 of its total potential returns per unit of risk. Staked Ether is currently generating about -0.01 per unit of volatility. If you would invest 383,617 in Staked Ether on August 25, 2024 and sell it today you would lose (50,848) from holding Staked Ether or give up 13.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.74% |
| Values | Daily Returns |
SPACE vs. Staked Ether
Performance |
| Timeline |
| SPACE |
| Staked Ether |
SPACE and Staked Ether Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPACE and Staked Ether
The main advantage of trading using opposite SPACE and Staked Ether positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPACE 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 SPACE 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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