Correlation Between EigenLayer and COTI

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

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

Diversification Opportunities for EigenLayer and COTI

-0.02

Correlation Coefficient

EigenLayer  COTI

Good diversification

The 3 months correlation between EigenLayer and COTI is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding EigenLayer and COTI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COTI and EigenLayer 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 EigenLayer are associated (or correlated) with COTI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COTI has no effect on the direction of EigenLayer i.e., EigenLayer and COTI go up and down completely randomly.

Pair Corralation between EigenLayer and COTI

Assuming the 90 days trading horizon EigenLayer is expected to generate 1.92 times more return on investment than COTI. However, EigenLayer is 1.92 times more volatile than COTI. It trades about 0.09 of its potential returns per unit of risk. COTI is currently generating about -0.06 per unit of risk. If you would invest  102.00  in EigenLayer on April 25, 2025 and sell it today you would earn a total of  32.00  from holding EigenLayer or generate 31.37% return on investment over 90 days.

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

EigenLayer  vs.  COTI

EigenLayer

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in EigenLayer are ranked lower than 6 (%) 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.

COTI

Risk-Adjusted Performance

Very Weak

Over the last 90 days COTI has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in August 2025. The latest tumult may also be a sign of longer-term up-swing for COTI shareholders.

Pair Trading with EigenLayer and COTI

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

The idea behind EigenLayer and COTI 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.