Correlation Between Ether Fund and BetaPro Natural
Can any of the company-specific risk be diversified away by investing in both Ether Fund and BetaPro Natural 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 Ether Fund and BetaPro Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ether Fund and BetaPro Natural Gas, you can compare the effects of market volatilities on Ether Fund and BetaPro Natural 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 Ether Fund with a short position of BetaPro Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ether Fund and BetaPro Natural.
Diversification Opportunities for Ether Fund and BetaPro Natural
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ether and BetaPro is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Ether Fund and BetaPro Natural Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BetaPro Natural Gas and Ether Fund 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 Ether Fund are associated (or correlated) with BetaPro Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BetaPro Natural Gas has no effect on the direction of Ether Fund i.e., Ether Fund and BetaPro Natural go up and down completely randomly.
Pair Corralation between Ether Fund and BetaPro Natural
Assuming the 90 days trading horizon Ether Fund is expected to generate 1.63 times more return on investment than BetaPro Natural. However, Ether Fund is 1.63 times more volatile than BetaPro Natural Gas. It trades about 0.07 of its potential returns per unit of risk. BetaPro Natural Gas is currently generating about 0.02 per unit of risk. If you would invest 2,385 in Ether Fund on November 2, 2024 and sell it today you would earn a total of 2,810 from holding Ether Fund or generate 117.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.18% |
| Values | Daily Returns |
Ether Fund vs. BetaPro Natural Gas
Performance |
| Timeline |
| Ether Fund |
| BetaPro Natural Gas |
Ether Fund and BetaPro Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ether Fund and BetaPro Natural
The main advantage of trading using opposite Ether Fund and BetaPro Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ether Fund position performs unexpectedly, BetaPro Natural 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 BetaPro Natural will offset losses from the drop in BetaPro Natural's long position.| Ether Fund vs. Ether Fund | Ether Fund vs. Ether ETF CAD | Ether Fund vs. NBI High Yield | Ether Fund vs. NBI Unconstrained Fixed |
| BetaPro Natural vs. BetaPro Natural Gas | BetaPro Natural vs. BetaPro Crude Oil | BetaPro Natural vs. BetaPro Canadian Gold | BetaPro Natural vs. BetaPro Crude Oil |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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