Correlation Between Chainlink and Staked Ether

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Can any of the company-specific risk be diversified away by investing in both Chainlink 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 Chainlink and Staked Ether into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chainlink and Staked Ether, you can compare the effects of market volatilities on Chainlink 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 Chainlink with a short position of Staked Ether. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chainlink and Staked Ether.

Diversification Opportunities for Chainlink and Staked Ether

0.51
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Chainlink and Staked is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Chainlink and Staked Ether in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Staked Ether and Chainlink 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 Chainlink 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 Chainlink i.e., Chainlink and Staked Ether go up and down completely randomly.

Pair Corralation between Chainlink and Staked Ether

Assuming the 90 days trading horizon Chainlink is expected to generate 1.27 times more return on investment than Staked Ether. However, Chainlink is 1.27 times more volatile than Staked Ether. It trades about 0.04 of its potential returns per unit of risk. Staked Ether is currently generating about 0.03 per unit of risk. If you would invest  1,112  in Chainlink on January 22, 2024 and sell it today you would earn a total of  384.00  from holding Chainlink or generate 34.53% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy99.81%
ValuesDaily Returns

Chainlink  vs.  Staked Ether

 Performance 
       Timeline  
Chainlink 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Chainlink are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Chainlink may actually be approaching a critical reversion point that can send shares even higher in May 2024.
Staked Ether 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Staked Ether are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical indicators, Staked Ether exhibited solid returns over the last few months and may actually be approaching a breakup point.

Chainlink and Staked Ether Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Chainlink and Staked Ether

The main advantage of trading using opposite Chainlink and Staked Ether positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chainlink 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 Chainlink 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.
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

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