Correlation Between Wrapped EETH and XT Token
Can any of the company-specific risk be diversified away by investing in both Wrapped EETH and XT Token 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 Wrapped EETH and XT Token into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wrapped eETH and XT Token, you can compare the effects of market volatilities on Wrapped EETH and XT Token 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 Wrapped EETH with a short position of XT Token. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wrapped EETH and XT Token.
Diversification Opportunities for Wrapped EETH and XT Token
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Wrapped and XT Token is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Wrapped eETH and XT Token in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XT Token and Wrapped EETH 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 Wrapped eETH are associated (or correlated) with XT Token. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XT Token has no effect on the direction of Wrapped EETH i.e., Wrapped EETH and XT Token go up and down completely randomly.
Pair Corralation between Wrapped EETH and XT Token
Assuming the 90 days trading horizon Wrapped eETH is expected to generate 1.68 times more return on investment than XT Token. However, Wrapped EETH is 1.68 times more volatile than XT Token. It trades about 0.13 of its potential returns per unit of risk. XT Token is currently generating about 0.13 per unit of risk. If you would invest 230,791 in Wrapped eETH on June 1, 2025 and sell it today you would earn a total of 219,870 from holding Wrapped eETH or generate 95.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wrapped eETH vs. XT Token
Performance |
| Timeline |
| Wrapped eETH |
| XT Token |
Wrapped EETH and XT Token Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wrapped EETH and XT Token
The main advantage of trading using opposite Wrapped EETH and XT Token positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wrapped EETH position performs unexpectedly, XT Token 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 XT Token will offset losses from the drop in XT Token's long position.| Wrapped EETH vs. Wrapped Beacon ETH | Wrapped EETH vs. Staked Ether | Wrapped EETH vs. Phala Network | Wrapped EETH vs. EOSDAC |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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