Correlation Between Staked Ether and Safe
Can any of the company-specific risk be diversified away by investing in both Staked Ether and Safe 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 Safe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Staked Ether and Safe, you can compare the effects of market volatilities on Staked Ether and Safe 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 Safe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Staked Ether and Safe.
Diversification Opportunities for Staked Ether and Safe
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Staked and Safe is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Staked Ether and Safe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safe 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 Safe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safe has no effect on the direction of Staked Ether i.e., Staked Ether and Safe go up and down completely randomly.
Pair Corralation between Staked Ether and Safe
Assuming the 90 days trading horizon Staked Ether is expected to generate 0.79 times more return on investment than Safe. However, Staked Ether is 1.26 times less risky than Safe. It trades about 0.31 of its potential returns per unit of risk. Safe is currently generating about -0.07 per unit of risk. If you would invest 263,684 in Staked Ether on August 28, 2024 and sell it today you would earn a total of 77,429 from holding Staked Ether or generate 29.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Staked Ether vs. Safe
Performance |
| Timeline |
| Staked Ether |
| Safe |
Staked Ether and Safe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Staked Ether and Safe
The main advantage of trading using opposite Staked Ether and Safe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Staked Ether position performs unexpectedly, Safe 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 Safe will offset losses from the drop in Safe's long position.The idea behind Staked Ether and Safe 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.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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |