Correlation Between Bifrost and EigenLayer

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

By analyzing existing cross correlation between Bifrost and EigenLayer, you can compare the effects of market volatilities on Bifrost and EigenLayer 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 Bifrost with a short position of EigenLayer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bifrost and EigenLayer.

Diversification Opportunities for Bifrost and EigenLayer

0.19

Correlation Coefficient

Bifrost  EigenLayer

Average diversification

The 3 months correlation between Bifrost and EigenLayer is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Bifrost and EigenLayer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EigenLayer and Bifrost 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 Bifrost are associated (or correlated) with EigenLayer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EigenLayer has no effect on the direction of Bifrost i.e., Bifrost and EigenLayer go up and down completely randomly.

Pair Corralation between Bifrost and EigenLayer

Assuming the 90 days trading horizon Bifrost is expected to generate 1.56 times less return on investment than EigenLayer. But when comparing it to its historical volatility, Bifrost is 2.35 times less risky than EigenLayer. It trades about 0.17 of its potential returns per unit of risk. EigenLayer is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  98.00  in EigenLayer on April 24, 2025 and sell it today you would earn a total of  51.00  from holding EigenLayer or generate 52.04% return on investment over 90 days.

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

Bifrost  vs.  EigenLayer

Bifrost

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bifrost are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Bifrost exhibited solid returns over the last few months and may actually be approaching a breakup point.

EigenLayer

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in EigenLayer are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, EigenLayer exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bifrost and EigenLayer

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

The idea behind Bifrost and EigenLayer 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.