Correlation Between Staked Ether and Marinade

Can any of the company-specific risk be diversified away by investing in both Staked Ether and Marinade 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 Marinade into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Staked Ether and Marinade, you can compare the effects of market volatilities on Staked Ether and Marinade 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 Marinade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Staked Ether and Marinade.

Diversification Opportunities for Staked Ether and Marinade

0.4

Correlation Coefficient

Staked Ether  Marinade

Very weak diversification

The 3 months correlation between Staked and Marinade is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Staked Ether and Marinade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marinade 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 Marinade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marinade has no effect on the direction of Staked Ether i.e., Staked Ether and Marinade go up and down completely randomly.

Pair Corralation between Staked Ether and Marinade

Assuming the 90 days trading horizon Staked Ether is expected to generate 15.72 times less return on investment than Marinade. But when comparing it to its historical volatility, Staked Ether is 18.22 times less risky than Marinade. It trades about 0.08 of its potential returns per unit of risk. Marinade is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Marinade on January 29, 2024 and sell it today you would earn a total of  17.00  from holding Marinade or generate 9.223372036854776E16% 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.  Marinade

Staked Ether

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Staked Ether are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical indicators, Staked Ether exhibited solid returns over the last few months and may actually be approaching a breakup point.

Marinade

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marinade 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 basic indicators remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for Marinade shareholders.

Pair Trading with Staked Ether and Marinade

The main advantage of trading using opposite Staked Ether and Marinade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Staked Ether position performs unexpectedly, Marinade 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 Marinade will offset losses from the drop in Marinade's long position.

The idea behind Staked Ether and Marinade 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.