Correlation Between DYdX and EigenLayer

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

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

Diversification Opportunities for DYdX and EigenLayer

0.1

Correlation Coefficient

DYdX  EigenLayer

Average diversification

The 3 months correlation between DYdX and EigenLayer is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding dYdX and EigenLayer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EigenLayer and DYdX 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 dYdX 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 DYdX i.e., DYdX and EigenLayer go up and down completely randomly.

Pair Corralation between DYdX and EigenLayer

Assuming the 90 days trading horizon dYdX is expected to generate 0.74 times more return on investment than EigenLayer. However, dYdX is 1.36 times less risky than EigenLayer. It trades about -0.04 of its potential returns per unit of risk. EigenLayer is currently generating about -0.17 per unit of risk. If you would invest  61.00  in dYdX on April 10, 2025 and sell it today you would lose (4.00) from holding dYdX or give up 6.56% of portfolio value over 90 days.

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

dYdX  vs.  EigenLayer

dYdX

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in dYdX are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, DYdX may actually be approaching a critical reversion point that can send shares even higher in August 2025.

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 DYdX and EigenLayer

The main advantage of trading using opposite DYdX and EigenLayer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DYdX 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 dYdX 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.

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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.