Correlation Between Staked Ether and Biomerica

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

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

Diversification Opportunities for Staked Ether and Biomerica

0.31

Correlation Coefficient

Staked Ether  Biomerica

Weak diversification

The 3 months correlation between Staked and Biomerica is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Staked Ether and Biomerica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biomerica 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 Biomerica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biomerica has no effect on the direction of Staked Ether i.e., Staked Ether and Biomerica go up and down completely randomly.

Pair Corralation between Staked Ether and Biomerica

Assuming the 90 days trading horizon Staked Ether is expected to generate 1.23 times more return on investment than Biomerica. However, Staked Ether is 1.23 times more volatile than Biomerica. It trades about -0.03 of its potential returns per unit of risk. Biomerica is currently generating about -0.43 per unit of risk. If you would invest  327,284  in Staked Ether on January 31, 2024 and sell it today you would lose (10,450) from holding Staked Ether or give up 3.19% of portfolio value over 90 days.

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

Staked Ether  vs.  Biomerica

Staked Ether

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Staked Ether are ranked lower than 11 (%) 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.

Biomerica

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Biomerica has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Staked Ether and Biomerica

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

The idea behind Staked Ether and Biomerica 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.