Correlation Between ETH and EXP

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

By analyzing existing cross correlation between ETH and EXP, you can compare the effects of market volatilities on ETH and EXP 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 ETH with a short position of EXP. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETH and EXP.

Diversification Opportunities for ETH and EXP

0.24

Correlation Coefficient

ETH  EXP

Modest diversification

The 3 months correlation between ETH and EXP is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding ETH and EXP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EXP and ETH 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 ETH are associated (or correlated) with EXP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EXP has no effect on the direction of ETH i.e., ETH and EXP go up and down completely randomly.

Pair Corralation between ETH and EXP

Assuming the 90 days trading horizon ETH is expected to generate 0.46 times more return on investment than EXP. However, ETH is 2.17 times less risky than EXP. It trades about 0.26 of its potential returns per unit of risk. EXP is currently generating about -0.08 per unit of risk. If you would invest  182,145  in ETH on April 25, 2025 and sell it today you would earn a total of  181,011  from holding ETH or generate 99.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

ETH  vs.  EXP

ETH

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ETH are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical indicators, ETH exhibited solid returns over the last few months and may actually be approaching a breakup point.

EXP

Risk-Adjusted Performance

Very Weak

Over the last 90 days EXP 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 August 2025. The latest tumult may also be a sign of longer-term up-swing for EXP shareholders.

Pair Trading with ETH and EXP

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

The idea behind ETH and EXP 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.