Correlation Between Staked Ether and Toncoin

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

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

Diversification Opportunities for Staked Ether and Toncoin

0.17

Correlation Coefficient

Staked Ether  Toncoin

Average diversification

The 3 months correlation between Staked and Toncoin is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Staked Ether and Toncoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toncoin 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 Toncoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Toncoin has no effect on the direction of Staked Ether i.e., Staked Ether and Toncoin go up and down completely randomly.

Pair Corralation between Staked Ether and Toncoin

Assuming the 90 days trading horizon Staked Ether is expected to generate 7.41 times less return on investment than Toncoin. But when comparing it to its historical volatility, Staked Ether is 4.85 times less risky than Toncoin. It trades about 0.07 of its potential returns per unit of risk. Toncoin is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  53.00  in Toncoin on August 23, 2024 and sell it today you would earn a total of  476.00  from holding Toncoin or generate 898.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	64.03%
Values	Daily Returns

Staked Ether  vs.  Toncoin

Staked Ether

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Staked Ether are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Staked Ether exhibited solid returns over the last few months and may actually be approaching a breakup point.

Toncoin

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Toncoin has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Crypto's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for Toncoin shareholders.

Pair Trading with Staked Ether and Toncoin

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

The idea behind Staked Ether and Toncoin 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.