Correlation Between Ethena and TokenFi

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

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

Diversification Opportunities for Ethena and TokenFi

0.82

Correlation Coefficient

Ethena  TokenFi

Very poor diversification

The 3 months correlation between Ethena and TokenFi is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Ethena and TokenFi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TokenFi 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 TokenFi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TokenFi has no effect on the direction of Ethena i.e., Ethena and TokenFi go up and down completely randomly.

Pair Corralation between Ethena and TokenFi

Assuming the 90 days trading horizon Ethena is expected to generate 1.08 times less return on investment than TokenFi. But when comparing it to its historical volatility, Ethena is 1.07 times less risky than TokenFi. It trades about 0.08 of its potential returns per unit of risk. TokenFi is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1.50  in TokenFi on April 20, 2025 and sell it today you would earn a total of  0.35  from holding TokenFi or generate 23.33% return on investment over 90 days.

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

Ethena  vs.  TokenFi

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.

TokenFi

Risk-Adjusted Performance

Modest

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

Pair Trading with Ethena and TokenFi

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

The idea behind Ethena and TokenFi 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 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.