Correlation Between Staked Ether and MTL

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Can any of the company-specific risk be diversified away by investing in both Staked Ether and MTL 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 MTL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Staked Ether and MTL, you can compare the effects of market volatilities on Staked Ether and MTL 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 MTL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Staked Ether and MTL.

Diversification Opportunities for Staked Ether and MTL

StakedMTLDiversified AwayStakedMTLDiversified Away100%
0.85
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Staked and MTL is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Staked Ether and MTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MTL 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 MTL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MTL has no effect on the direction of Staked Ether i.e., Staked Ether and MTL go up and down completely randomly.

Pair Corralation between Staked Ether and MTL

Assuming the 90 days trading horizon Staked Ether is expected to under-perform the MTL. But the crypto coin apears to be less risky and, when comparing its historical volatility, Staked Ether is 1.21 times less risky than MTL. The crypto coin trades about -0.19 of its potential returns per unit of risk. The MTL is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest  119.00  in MTL on November 25, 2024 and sell it today you would lose (20.00) from holding MTL or give up 16.81% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Staked Ether  vs.  MTL

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -30-20-100102030
JavaScript chart by amCharts 3.21.15STETH MTL
       Timeline  
Staked Ether 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Staked Ether has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Crypto's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for Staked Ether shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb2,6002,8003,0003,2003,4003,6003,8004,000
MTL 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days MTL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's essential indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for MTL shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb11.21.41.61.8

Staked Ether and MTL Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.69-5.01-3.33-1.650.01.573.174.776.38 0.0100.0150.020
JavaScript chart by amCharts 3.21.15STETH MTL
       Returns  

Pair Trading with Staked Ether and MTL

The main advantage of trading using opposite Staked Ether and MTL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Staked Ether position performs unexpectedly, MTL 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 MTL will offset losses from the drop in MTL's long position.
The idea behind Staked Ether and MTL pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.

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