Correlation Between SOUL and ETH

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

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

Diversification Opportunities for SOUL and ETH

-0.48

Correlation Coefficient

SOUL  ETH

Very good diversification

The 3 months correlation between SOUL and ETH is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding SOUL and ETH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETH and SOUL 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 SOUL are associated (or correlated) with ETH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETH has no effect on the direction of SOUL i.e., SOUL and ETH go up and down completely randomly.

Pair Corralation between SOUL and ETH

Assuming the 90 days trading horizon SOUL is expected to under-perform the ETH. In addition to that, SOUL is 1.45 times more volatile than ETH. It trades about -0.06 of its total potential returns per unit of risk. ETH is currently generating about 0.27 per unit of volatility. If you would invest  179,847  in ETH on April 26, 2025 and sell it today you would earn a total of  191,767  from holding ETH or generate 106.63% return on investment over 90 days.

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

SOUL  vs.  ETH

SOUL

Risk-Adjusted Performance

Very Weak

Over the last 90 days SOUL 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 fundamental 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 SOUL shareholders.

ETH

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ETH are ranked lower than 21 (%) 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.

Pair Trading with SOUL and ETH

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

The idea behind SOUL and ETH 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.