Correlation Between Ethena and Open Loot

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

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

Diversification Opportunities for Ethena and Open Loot

0.56

Correlation Coefficient

Ethena  Open Loot

Very weak diversification

The 3 months correlation between Ethena and Open is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Ethena and Open Loot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Open Loot and Ethena 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 Ethena are associated (or correlated) with Open Loot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Open Loot has no effect on the direction of Ethena i.e., Ethena and Open Loot go up and down completely randomly.

Pair Corralation between Ethena and Open Loot

Assuming the 90 days trading horizon Ethena is expected to generate 0.87 times more return on investment than Open Loot. However, Ethena is 1.15 times less risky than Open Loot. It trades about 0.08 of its potential returns per unit of risk. Open Loot is currently generating about -0.08 per unit of risk. If you would invest  32.00  in Ethena on April 20, 2025 and sell it today you would earn a total of  7.00  from holding Ethena or generate 21.88% return on investment over 90 days.

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

Ethena  vs.  Open Loot

Ethena

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ethena are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Ethena exhibited solid returns over the last few months and may actually be approaching a breakup point.

Open Loot

Risk-Adjusted Performance

Very Weak

Over the last 90 days Open Loot 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 Open Loot shareholders.

Pair Trading with Ethena and Open Loot

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

The idea behind Ethena and Open Loot 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.