Correlation Between Staked Ether and UUU

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

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

Diversification Opportunities for Staked Ether and UUU

0.89

Correlation Coefficient

Staked Ether  UUU

Very poor diversification

The 3 months correlation between Staked and UUU is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Staked Ether and UUU in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UUU 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 UUU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UUU has no effect on the direction of Staked Ether i.e., Staked Ether and UUU go up and down completely randomly.

Pair Corralation between Staked Ether and UUU

Assuming the 90 days trading horizon Staked Ether is expected to generate 1.39 times less return on investment than UUU. But when comparing it to its historical volatility, Staked Ether is 1.59 times less risky than UUU. It trades about 0.17 of its potential returns per unit of risk. UUU is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  0.00  in UUU on August 30, 2024 and sell it today you would earn a total of  0.00  from holding UUU or generate 60.0% return on investment over 90 days.

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

Staked Ether  vs.  UUU

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.

UUU

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in UUU are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, UUU exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Staked Ether and UUU

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

The idea behind Staked Ether and UUU 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.