Correlation Between XCAD Network and Ethena
Can any of the company-specific risk be diversified away by investing in both XCAD Network and Ethena 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 XCAD Network and Ethena into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XCAD Network and Ethena, you can compare the effects of market volatilities on XCAD Network and Ethena 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 XCAD Network with a short position of Ethena. Check out your portfolio center. Please also check ongoing floating volatility patterns of XCAD Network and Ethena.
Diversification Opportunities for XCAD Network and Ethena
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between XCAD and Ethena is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding XCAD Network and Ethena in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ethena and XCAD Network 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 XCAD Network are associated (or correlated) with Ethena. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ethena has no effect on the direction of XCAD Network i.e., XCAD Network and Ethena go up and down completely randomly.
Pair Corralation between XCAD Network and Ethena
Assuming the 90 days trading horizon XCAD Network is expected to generate 1.38 times less return on investment than Ethena. But when comparing it to its historical volatility, XCAD Network is 1.2 times less risky than Ethena. It trades about 0.08 of its potential returns per unit of risk. Ethena is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 80.00 in Ethena on March 2, 2024 and sell it today you would earn a total of 7.00 from holding Ethena or generate 8.75% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
XCAD Network vs. Ethena
Performance |
Timeline |
XCAD Network |
Ethena |
XCAD Network and Ethena Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with XCAD Network and Ethena
The main advantage of trading using opposite XCAD Network and Ethena positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XCAD Network position performs unexpectedly, Ethena 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 Ethena will offset losses from the drop in Ethena's long position.XCAD Network vs. Solana | XCAD Network vs. XRP | XCAD Network vs. Staked Ether | XCAD Network vs. The Open Network |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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