Correlation Between 0x and Ethereum
Can any of the company-specific risk be diversified away by investing in both 0x and Ethereum 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 0x and Ethereum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 0x and Ethereum, you can compare the effects of market volatilities on 0x and Ethereum 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 0x with a short position of Ethereum. Check out your portfolio center. Please also check ongoing floating volatility patterns of 0x and Ethereum.
Diversification Opportunities for 0x and Ethereum
Poor diversification
The 3 months correlation between 0x and Ethereum is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding 0x and Ethereum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ethereum and 0x 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 0x are associated (or correlated) with Ethereum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ethereum has no effect on the direction of 0x i.e., 0x and Ethereum go up and down completely randomly.
Pair Corralation between 0x and Ethereum
Assuming the 90 days trading horizon 0x is expected to generate 3.31 times more return on investment than Ethereum. However, 0x is 3.31 times more volatile than Ethereum. It trades about 0.11 of its potential returns per unit of risk. Ethereum is currently generating about 0.02 per unit of risk. If you would invest 37.00 in 0x on January 19, 2024 and sell it today you would earn a total of 12.00 from holding 0x or generate 32.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
0x vs. Ethereum
Performance |
| Timeline |
| 0x |
| Ethereum |
0x and Ethereum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 0x and Ethereum
The main advantage of trading using opposite 0x and Ethereum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 0x position performs unexpectedly, Ethereum 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 will offset losses from the drop in Ethereum's long position.The idea behind 0x and Ethereum 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |