Correlation Between XMR and Staked Ether

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

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

Diversification Opportunities for XMR and Staked Ether

-0.17

Correlation Coefficient

XMR  Staked Ether

Good diversification

The 3 months correlation between XMR and Staked is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding XMR and Staked Ether in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Staked Ether and XMR 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 XMR 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 XMR i.e., XMR and Staked Ether go up and down completely randomly.

Pair Corralation between XMR and Staked Ether

Assuming the 90 days trading horizon XMR is expected to under-perform the Staked Ether. But the crypto coin apears to be less risky and, when comparing its historical volatility, XMR is 1.3 times less risky than Staked Ether. The crypto coin trades about -0.03 of its potential returns per unit of risk. The Staked Ether is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  251,200  in Staked Ether on August 30, 2024 and sell it today you would earn a total of  113,228  from holding Staked Ether or generate 45.07% return on investment over 90 days.

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

XMR  vs.  Staked Ether

XMR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days XMR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, XMR 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 XMR and Staked Ether

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

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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.