Correlation Between CoinShares Physical and CoinShares Physical

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

Diversification Opportunities for CoinShares Physical and CoinShares Physical

CoinSharesCoinSharesDiversified AwayCoinSharesCoinSharesDiversified Away100%
-0.05
  Correlation Coefficient

Good diversification

The 3 months correlation between CoinShares and CoinShares is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding CoinShares Physical Litecoin and CoinShares Physical Ethereum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CoinShares Physical and CoinShares Physical 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 CoinShares Physical Litecoin are associated (or correlated) with CoinShares Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CoinShares Physical has no effect on the direction of CoinShares Physical i.e., CoinShares Physical and CoinShares Physical go up and down completely randomly.

Pair Corralation between CoinShares Physical and CoinShares Physical

Assuming the 90 days trading horizon CoinShares Physical Litecoin is expected to generate 1.65 times more return on investment than CoinShares Physical. However, CoinShares Physical is 1.65 times more volatile than CoinShares Physical Ethereum. It trades about 0.02 of its potential returns per unit of risk. CoinShares Physical Ethereum is currently generating about -0.38 per unit of risk. If you would invest  2,211  in CoinShares Physical Litecoin on December 2, 2024 and sell it today you would lose (81.00) from holding CoinShares Physical Litecoin or give up 3.66% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

CoinShares Physical Litecoin  vs.  CoinShares Physical Ethereum

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 0204060
JavaScript chart by amCharts 3.21.15LITE ETHE
       Timeline  
CoinShares Physical 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in CoinShares Physical Litecoin are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, CoinShares Physical showed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFebMar1618202224
CoinShares Physical 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days CoinShares Physical Ethereum has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Etf's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the fund sophisticated investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFebMar60708090100

CoinShares Physical and CoinShares Physical Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-25.54-19.13-12.72-6.30.06.7213.4520.1726.9 0.0050.0100.0150.020
JavaScript chart by amCharts 3.21.15LITE ETHE
       Returns  

Pair Trading with CoinShares Physical and CoinShares Physical

The main advantage of trading using opposite CoinShares Physical and CoinShares Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CoinShares Physical position performs unexpectedly, CoinShares Physical 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 CoinShares Physical will offset losses from the drop in CoinShares Physical's long position.
The idea behind CoinShares Physical Litecoin and CoinShares Physical Ethereum 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

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