Correlation Between GMB and Staked Ether

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

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

Diversification Opportunities for GMB and Staked Ether

0.5

Correlation Coefficient

GMB  Staked Ether

Very weak diversification

The 3 months correlation between GMB and Staked is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding GMB and Staked Ether in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Staked Ether and GMB 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 GMB 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 GMB i.e., GMB and Staked Ether go up and down completely randomly.

Pair Corralation between GMB and Staked Ether

If you would invest  265,011  in Staked Ether on August 30, 2024 and sell it today you would earn a total of  99,417  from holding Staked Ether or generate 37.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	4.35%
Values	Daily Returns

GMB  vs.  Staked Ether

GMB

Risk-Adjusted Performance

0 of 100

Very Weak

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

Staked Ether

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Staked Ether are ranked lower than 13 (%) 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.

Pair Trading with GMB and Staked Ether

The main advantage of trading using opposite GMB and Staked Ether positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMB 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 GMB 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.

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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.