Correlation Between Staked Ether and Ethereum PoW
Can any of the company-specific risk be diversified away by investing in both Staked Ether and Ethereum PoW 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 Ethereum PoW into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Staked Ether and Ethereum PoW, you can compare the effects of market volatilities on Staked Ether and Ethereum PoW 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 Ethereum PoW. Check out your portfolio center. Please also check ongoing floating volatility patterns of Staked Ether and Ethereum PoW.
Diversification Opportunities for Staked Ether and Ethereum PoW
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Staked and Ethereum is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Staked Ether and Ethereum PoW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ethereum PoW 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 Ethereum PoW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ethereum PoW has no effect on the direction of Staked Ether i.e., Staked Ether and Ethereum PoW go up and down completely randomly.
Pair Corralation between Staked Ether and Ethereum PoW
Assuming the 90 days trading horizon Staked Ether is expected to generate 0.56 times more return on investment than Ethereum PoW. However, Staked Ether is 1.78 times less risky than Ethereum PoW. It trades about -0.04 of its potential returns per unit of risk. Ethereum PoW is currently generating about -0.16 per unit of risk. If you would invest 361,651 in Staked Ether on November 1, 2024 and sell it today you would lose (36,984) from holding Staked Ether or give up 10.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Staked Ether vs. Ethereum PoW
Performance |
| Timeline |
| Staked Ether |
| Ethereum PoW |
Staked Ether and Ethereum PoW Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Staked Ether and Ethereum PoW
The main advantage of trading using opposite Staked Ether and Ethereum PoW positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Staked Ether position performs unexpectedly, Ethereum PoW 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 Ethereum PoW will offset losses from the drop in Ethereum PoW's long position.| Staked Ether vs. Cronos | Staked Ether vs. Wrapped Bitcoin | Staked Ether vs. Monero | Staked Ether vs. Tether |
| Ethereum PoW vs. Ethereum Classic | Ethereum PoW vs. Ethereum Name Service | Ethereum PoW vs. Staked Ether | Ethereum PoW vs. Phala Network |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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