Correlation Between KuCoin Token and Ethereum
Can any of the company-specific risk be diversified away by investing in both KuCoin Token and Ethereum 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 KuCoin Token and Ethereum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KuCoin Token and Ethereum, you can compare the effects of market volatilities on KuCoin Token and Ethereum 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 KuCoin Token with a short position of Ethereum. Check out your portfolio center. Please also check ongoing floating volatility patterns of KuCoin Token and Ethereum.
Diversification Opportunities for KuCoin Token and Ethereum
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KuCoin and Ethereum is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding KuCoin Token and Ethereum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ethereum and KuCoin Token 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 KuCoin Token are associated (or correlated) with Ethereum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ethereum has no effect on the direction of KuCoin Token i.e., KuCoin Token and Ethereum go up and down completely randomly.
Pair Corralation between KuCoin Token and Ethereum
Assuming the 90 days trading horizon KuCoin Token is expected to under-perform the Ethereum. In addition to that, KuCoin Token is 1.46 times more volatile than Ethereum. It trades about -0.41 of its total potential returns per unit of risk. Ethereum is currently generating about -0.14 per unit of volatility. If you would invest 349,208 in Ethereum on January 20, 2024 and sell it today you would lose (42,376) from holding Ethereum or give up 12.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KuCoin Token vs. Ethereum
Performance |
| Timeline |
| KuCoin Token |
| Ethereum |
KuCoin Token and Ethereum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KuCoin Token and Ethereum
The main advantage of trading using opposite KuCoin Token and Ethereum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KuCoin Token position performs unexpectedly, Ethereum 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 Ethereum will offset losses from the drop in Ethereum's long position.| KuCoin Token vs. Solana | KuCoin Token vs. XRP | KuCoin Token vs. The Open Network | KuCoin Token vs. Staked Ether |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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