Correlation Between Ethereum and SOUL

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

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

Diversification Opportunities for Ethereum and SOUL

-0.46

Correlation Coefficient

Ethereum  SOUL

Very good diversification

The 3 months correlation between Ethereum and SOUL is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Ethereum and SOUL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOUL and Ethereum 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 Ethereum are associated (or correlated) with SOUL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOUL has no effect on the direction of Ethereum i.e., Ethereum and SOUL go up and down completely randomly.

Pair Corralation between Ethereum and SOUL

Assuming the 90 days trading horizon Ethereum is expected to generate 0.69 times more return on investment than SOUL. However, Ethereum is 1.45 times less risky than SOUL. It trades about 0.27 of its potential returns per unit of risk. SOUL is currently generating about -0.07 per unit of risk. If you would invest  175,704  in Ethereum on April 21, 2025 and sell it today you would earn a total of  183,094  from holding Ethereum or generate 104.21% return on investment over 90 days.

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

Ethereum  vs.  SOUL

Ethereum

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ethereum are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical indicators, Ethereum exhibited solid returns over the last few months and may actually be approaching a breakup point.

SOUL

Risk-Adjusted Performance

Very Weak

Over the last 90 days SOUL 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 SOUL shareholders.

Pair Trading with Ethereum and SOUL

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

The idea behind Ethereum and SOUL 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.