Correlation Between Staked Ether and Radworks

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

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

Diversification Opportunities for Staked Ether and Radworks

0.73

Correlation Coefficient

Staked Ether  Radworks

Poor diversification

The 3 months correlation between Staked and Radworks is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Staked Ether and Radworks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radworks 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 Radworks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Radworks has no effect on the direction of Staked Ether i.e., Staked Ether and Radworks go up and down completely randomly.

Pair Corralation between Staked Ether and Radworks

Assuming the 90 days trading horizon Staked Ether is expected to generate 0.64 times more return on investment than Radworks. However, Staked Ether is 1.57 times less risky than Radworks. It trades about 0.05 of its potential returns per unit of risk. Radworks is currently generating about -0.02 per unit of risk. If you would invest  278,589  in Staked Ether on February 16, 2024 and sell it today you would earn a total of  21,800  from holding Staked Ether or generate 7.83% return on investment over 90 days.

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

Staked Ether  vs.  Radworks

Staked Ether

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Staked Ether are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical indicators, Staked Ether may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Radworks

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Radworks has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Crypto's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for Radworks shareholders.

Pair Trading with Staked Ether and Radworks

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

The idea behind Staked Ether and Radworks 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.