Correlation Between Ethereum and Dogecoin

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Ethereum and Dogecoin 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 Ethereum and Dogecoin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ethereum and Dogecoin, you can compare the effects of market volatilities on Ethereum and Dogecoin 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 Ethereum with a short position of Dogecoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ethereum and Dogecoin.

Diversification Opportunities for Ethereum and Dogecoin

0.43
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Ethereum and Dogecoin is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Ethereum and Dogecoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dogecoin and Ethereum 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 Ethereum are associated (or correlated) with Dogecoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dogecoin has no effect on the direction of Ethereum i.e., Ethereum and Dogecoin go up and down completely randomly.

Pair Corralation between Ethereum and Dogecoin

Assuming the 90 days trading horizon Ethereum is expected to generate 0.88 times more return on investment than Dogecoin. However, Ethereum is 1.14 times less risky than Dogecoin. It trades about -0.06 of its potential returns per unit of risk. Dogecoin is currently generating about -0.07 per unit of risk. If you would invest  406,276  in Ethereum on June 27, 2022 and sell it today you would lose (259,722)  from holding Ethereum or give up 63.93% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Ethereum  vs.  Dogecoin

 Performance (%) 
       Timeline  
Ethereum 
Ethereum Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Ethereum are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ethereum sustained solid returns over the last few months and may actually be approaching a breakup point.

Ethereum Price Channel

Dogecoin 
Dogecoin Performance
0 of 100
Over the last 90 days Dogecoin has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Dogecoin is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Dogecoin Price Channel

Ethereum and Dogecoin Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ethereum and Dogecoin

The main advantage of trading using opposite Ethereum and Dogecoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ethereum position performs unexpectedly, Dogecoin 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 Dogecoin will offset losses from the drop in Dogecoin's long position.
Ethereum vs. Cardano
Ethereum vs. Avalanche
Ethereum vs. Cosmos
Ethereum vs. Near
The idea behind Ethereum and Dogecoin 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.
Dogecoin vs. Bitcoin
Dogecoin vs. Litecoin
Dogecoin vs. Bitcoin Cash
Dogecoin vs. Bitcoin SV
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.

Other Complementary Tools

Bond Directory
Find actively traded corporate debentures issued by US companies
Go
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Go
CEO Directory
Screen CEOs from public companies around the world
Go
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Go
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Go
Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Go
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Go
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Go
ETF Directory
Find actively traded Exchange Traded Funds (ETF) from around the world
Go
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Go
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Go
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Go
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go