Correlation Between Wrapped EETH and FileCoin
Can any of the company-specific risk be diversified away by investing in both Wrapped EETH and FileCoin 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 Wrapped EETH and FileCoin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wrapped eETH and FileCoin, you can compare the effects of market volatilities on Wrapped EETH and FileCoin 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 Wrapped EETH with a short position of FileCoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wrapped EETH and FileCoin.
Diversification Opportunities for Wrapped EETH and FileCoin
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wrapped and FileCoin is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Wrapped eETH and FileCoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FileCoin and Wrapped EETH 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 Wrapped eETH are associated (or correlated) with FileCoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FileCoin has no effect on the direction of Wrapped EETH i.e., Wrapped EETH and FileCoin go up and down completely randomly.
Pair Corralation between Wrapped EETH and FileCoin
Assuming the 90 days trading horizon Wrapped eETH is expected to generate 0.77 times more return on investment than FileCoin. However, Wrapped eETH is 1.3 times less risky than FileCoin. It trades about -0.08 of its potential returns per unit of risk. FileCoin is currently generating about -0.06 per unit of risk. If you would invest 367,611 in Wrapped eETH on October 23, 2024 and sell it today you would lose (27,710) from holding Wrapped eETH or give up 7.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wrapped eETH vs. FileCoin
Performance |
| Timeline |
| Wrapped eETH |
| FileCoin |
Wrapped EETH and FileCoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wrapped EETH and FileCoin
The main advantage of trading using opposite Wrapped EETH and FileCoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wrapped EETH position performs unexpectedly, FileCoin 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 FileCoin will offset losses from the drop in FileCoin's long position.| Wrapped EETH vs. Wrapped Beacon ETH | Wrapped EETH vs. Staked Ether | Wrapped EETH vs. Phala Network | Wrapped EETH vs. EigenLayer |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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