Correlation Between Staked Ether and UBT

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

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

Diversification Opportunities for Staked Ether and UBT

0.65

Correlation Coefficient

Staked Ether  UBT

Poor diversification

The 3 months correlation between Staked and UBT is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Staked Ether and UBT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBT 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 UBT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBT has no effect on the direction of Staked Ether i.e., Staked Ether and UBT go up and down completely randomly.

Pair Corralation between Staked Ether and UBT

Assuming the 90 days trading horizon Staked Ether is expected to generate 2.14 times less return on investment than UBT. But when comparing it to its historical volatility, Staked Ether is 3.71 times less risky than UBT. It trades about 0.2 of its potential returns per unit of risk. UBT is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  2.96  in UBT on September 1, 2024 and sell it today you would earn a total of  1.46  from holding UBT or generate 49.32% return on investment over 90 days.

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

Staked Ether  vs.  UBT

Staked Ether

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Staked Ether are ranked lower than 15 (%) 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.

UBT

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in UBT are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, UBT exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Staked Ether and UBT

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

The idea behind Staked Ether and UBT 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 Transaction History module to view history of all your transactions and understand their impact on performance.