Correlation Between Tether and Theta Fuel

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

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

Diversification Opportunities for Tether and Theta Fuel

0.0

Correlation Coefficient

Tether  Theta Fuel

Pay attention - limited upside

The 3 months correlation between Tether and Theta is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Tether and Theta Fuel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Theta Fuel and Tether 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 Tether are associated (or correlated) with Theta Fuel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Theta Fuel has no effect on the direction of Tether i.e., Tether and Theta Fuel go up and down completely randomly.

Pair Corralation between Tether and Theta Fuel

If you would invest  100.00  in Tether on January 3, 2025 and sell it today you would earn a total of  0.00  from holding Tether or generate 0.0% return on investment over 90 days.

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

Tether  vs.  Theta Fuel

Tether

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tether has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Tether is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Theta Fuel

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Tether and Theta Fuel

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

The idea behind Tether and Theta Fuel 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.