Correlation Between EigenLayer and Lisk

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

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

Diversification Opportunities for EigenLayer and Lisk

0.21

Correlation Coefficient

EigenLayer  Lisk

Modest diversification

The 3 months correlation between EigenLayer and Lisk is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding EigenLayer and Lisk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lisk and EigenLayer 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 EigenLayer are associated (or correlated) with Lisk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lisk has no effect on the direction of EigenLayer i.e., EigenLayer and Lisk go up and down completely randomly.

Pair Corralation between EigenLayer and Lisk

Assuming the 90 days trading horizon EigenLayer is expected to generate 27.53 times more return on investment than Lisk. However, EigenLayer is 27.53 times more volatile than Lisk. It trades about 0.13 of its potential returns per unit of risk. Lisk is currently generating about 0.18 per unit of risk. If you would invest  0.00  in EigenLayer on August 30, 2024 and sell it today you would earn a total of  389.00  from holding EigenLayer or generate 9.223372036854776E16% return on investment over 90 days.

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

EigenLayer  vs.  Lisk

EigenLayer

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in EigenLayer are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, EigenLayer exhibited solid returns over the last few months and may actually be approaching a breakup point.

Lisk

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lisk are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady forward-looking signals, Lisk exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EigenLayer and Lisk

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

The idea behind EigenLayer and Lisk 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.