Correlation Between Tokocrypto and Staked Ether

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

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

Diversification Opportunities for Tokocrypto and Staked Ether

-0.05

Correlation Coefficient

Tokocrypto  Staked Ether

Good diversification

The 3 months correlation between Tokocrypto and Staked is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Tokocrypto and Staked Ether in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Staked Ether and Tokocrypto 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 Tokocrypto are associated (or correlated) with Staked Ether. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Staked Ether has no effect on the direction of Tokocrypto i.e., Tokocrypto and Staked Ether go up and down completely randomly.

Pair Corralation between Tokocrypto and Staked Ether

Assuming the 90 days trading horizon Tokocrypto is expected to generate 1.62 times more return on investment than Staked Ether. However, Tokocrypto is 1.62 times more volatile than Staked Ether. It trades about 0.07 of its potential returns per unit of risk. Staked Ether is currently generating about 0.03 per unit of risk. If you would invest  25.00  in Tokocrypto on August 6, 2024 and sell it today you would earn a total of  5.00  from holding Tokocrypto or generate 20.0% return on investment over 90 days.

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

Tokocrypto  vs.  Staked Ether

Tokocrypto

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tokocrypto are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Tokocrypto exhibited solid returns over the last few months and may actually be approaching a breakup point.

Staked Ether

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Staked Ether are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Staked Ether may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Tokocrypto and Staked Ether

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

The idea behind Tokocrypto and Staked Ether 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.