Correlation Between Wrapped Beacon and Chainlink

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

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

Diversification Opportunities for Wrapped Beacon and Chainlink

0.91

Correlation Coefficient

Wrapped Beacon  Chainlink

Almost no diversification

The 3 months correlation between Wrapped and Chainlink is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Wrapped Beacon ETH and Chainlink in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chainlink and Wrapped Beacon 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 Wrapped Beacon ETH are associated (or correlated) with Chainlink. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chainlink has no effect on the direction of Wrapped Beacon i.e., Wrapped Beacon and Chainlink go up and down completely randomly.

Pair Corralation between Wrapped Beacon and Chainlink

Assuming the 90 days trading horizon Wrapped Beacon ETH is expected to generate 0.81 times more return on investment than Chainlink. However, Wrapped Beacon ETH is 1.23 times less risky than Chainlink. It trades about 0.04 of its potential returns per unit of risk. Chainlink is currently generating about 0.01 per unit of risk. If you would invest  397,950  in Wrapped Beacon ETH on July 23, 2025 and sell it today you would earn a total of  21,857  from holding Wrapped Beacon ETH or generate 5.49% return on investment over 90 days.

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

Wrapped Beacon ETH  vs.  Chainlink

Wrapped Beacon ETH

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Wrapped Beacon ETH are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Wrapped Beacon may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Chainlink

Risk-Adjusted Performance

Weakest

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

Pair Trading with Wrapped Beacon and Chainlink

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

The idea behind Wrapped Beacon ETH and Chainlink 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.