Correlation Between Phala Network and EigenLayer
Can any of the company-specific risk be diversified away by investing in both Phala Network and EigenLayer 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 Phala Network and EigenLayer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phala Network and EigenLayer, you can compare the effects of market volatilities on Phala Network and EigenLayer 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 Phala Network with a short position of EigenLayer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phala Network and EigenLayer.
Diversification Opportunities for Phala Network and EigenLayer
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Phala and EigenLayer is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Phala Network and EigenLayer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EigenLayer and Phala Network 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 Phala Network are associated (or correlated) with EigenLayer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EigenLayer has no effect on the direction of Phala Network i.e., Phala Network and EigenLayer go up and down completely randomly.
Pair Corralation between Phala Network and EigenLayer
Assuming the 90 days trading horizon Phala Network is expected to generate 3.67 times more return on investment than EigenLayer. However, Phala Network is 3.67 times more volatile than EigenLayer. It trades about 0.2 of its potential returns per unit of risk. EigenLayer is currently generating about -0.09 per unit of risk. If you would invest 16.00 in Phala Network on October 10, 2024 and sell it today you would earn a total of 16.00 from holding Phala Network or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Phala Network vs. EigenLayer
Performance |
| Timeline |
| Phala Network |
| EigenLayer |
Phala Network and EigenLayer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phala Network and EigenLayer
The main advantage of trading using opposite Phala Network and EigenLayer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phala Network position performs unexpectedly, EigenLayer 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 EigenLayer will offset losses from the drop in EigenLayer's long position.| Phala Network vs. Fwog | Phala Network vs. Staked Ether | Phala Network vs. EigenLayer | Phala Network vs. EOSDAC |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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