Correlation Between Staked Ether and Polkadot
Can any of the company-specific risk be diversified away by investing in both Staked Ether and Polkadot 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 Staked Ether and Polkadot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Staked Ether and Polkadot, you can compare the effects of market volatilities on Staked Ether and Polkadot 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 Staked Ether with a short position of Polkadot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Staked Ether and Polkadot.
Diversification Opportunities for Staked Ether and Polkadot
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Staked and Polkadot is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Staked Ether and Polkadot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polkadot and Staked Ether 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 Staked Ether are associated (or correlated) with Polkadot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polkadot has no effect on the direction of Staked Ether i.e., Staked Ether and Polkadot go up and down completely randomly.
Pair Corralation between Staked Ether and Polkadot
Assuming the 90 days trading horizon Staked Ether is expected to generate 0.67 times more return on investment than Polkadot. However, Staked Ether is 1.5 times less risky than Polkadot. It trades about -0.21 of its potential returns per unit of risk. Polkadot is currently generating about -0.23 per unit of risk. If you would invest 329,979 in Staked Ether on November 18, 2024 and sell it today you would lose (60,677) from holding Staked Ether or give up 18.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Staked Ether vs. Polkadot
Performance |
| Timeline |
| Staked Ether |
| Polkadot |
Staked Ether and Polkadot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Staked Ether and Polkadot
The main advantage of trading using opposite Staked Ether and Polkadot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Staked Ether position performs unexpectedly, Polkadot 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 Polkadot will offset losses from the drop in Polkadot's long position.| Staked Ether vs. Cronos | Staked Ether vs. Wrapped Bitcoin | Staked Ether vs. Monero | Staked Ether vs. Tether |
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 Stocks Directory module to find actively traded stocks across global markets.
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