Correlation Between Staked Ether and LAMB
Can any of the company-specific risk be diversified away by investing in both Staked Ether and LAMB 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 LAMB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Staked Ether and LAMB, you can compare the effects of market volatilities on Staked Ether and LAMB 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 LAMB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Staked Ether and LAMB.
Diversification Opportunities for Staked Ether and LAMB
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Staked and LAMB is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Staked Ether and LAMB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LAMB 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 LAMB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LAMB has no effect on the direction of Staked Ether i.e., Staked Ether and LAMB go up and down completely randomly.
Pair Corralation between Staked Ether and LAMB
Assuming the 90 days trading horizon Staked Ether is expected to under-perform the LAMB. But the crypto coin apears to be less risky and, when comparing its historical volatility, Staked Ether is 3.66 times less risky than LAMB. The crypto coin trades about -0.03 of its potential returns per unit of risk. The LAMB is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 0.17 in LAMB on November 18, 2024 and sell it today you would lose (0.03) from holding LAMB or give up 17.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Staked Ether vs. LAMB
Performance |
| Timeline |
| Staked Ether |
| LAMB |
Staked Ether and LAMB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Staked Ether and LAMB
The main advantage of trading using opposite Staked Ether and LAMB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Staked Ether position performs unexpectedly, LAMB 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 LAMB will offset losses from the drop in LAMB'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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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