Correlation Between Ethereum and Worldcoin

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

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

Diversification Opportunities for Ethereum and Worldcoin

0.19

Correlation Coefficient

Ethereum  Worldcoin

Average diversification

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

Pair Corralation between Ethereum and Worldcoin

Assuming the 90 days trading horizon Ethereum is expected to generate 0.62 times more return on investment than Worldcoin. However, Ethereum is 1.62 times less risky than Worldcoin. It trades about 0.26 of its potential returns per unit of risk. Worldcoin is currently generating about 0.1 per unit of risk. If you would invest  179,587  in Ethereum on April 22, 2025 and sell it today you would earn a total of  179,847  from holding Ethereum or generate 100.14% return on investment over 90 days.

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

Ethereum  vs.  Worldcoin

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.

Worldcoin

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Worldcoin are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Worldcoin exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ethereum and Worldcoin

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

The idea behind Ethereum and Worldcoin 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..