Correlation Between EigenLayer and Orca

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

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

Diversification Opportunities for EigenLayer and Orca

0.19

Correlation Coefficient

EigenLayer  Orca

Average diversification

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

Pair Corralation between EigenLayer and Orca

Assuming the 90 days trading horizon EigenLayer is expected to generate 1.59 times more return on investment than Orca. However, EigenLayer is 1.59 times more volatile than Orca. It trades about 0.12 of its potential returns per unit of risk. Orca is currently generating about 0.0 per unit of risk. If you would invest  92.00  in EigenLayer on April 21, 2025 and sell it today you would earn a total of  62.00  from holding EigenLayer or generate 67.39% return on investment over 90 days.

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

EigenLayer  vs.  Orca

EigenLayer

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in EigenLayer are ranked lower than 9 (%) 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.

Orca

Risk-Adjusted Performance

Very Weak

Over the last 90 days Orca has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Orca is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with EigenLayer and Orca

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

The idea behind EigenLayer and Orca 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..