Correlation Between AKRO and Illuvium
Can any of the company-specific risk be diversified away by investing in both AKRO and Illuvium 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 AKRO and Illuvium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AKRO and Illuvium, you can compare the effects of market volatilities on AKRO and Illuvium 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 AKRO with a short position of Illuvium. Check out your portfolio center. Please also check ongoing floating volatility patterns of AKRO and Illuvium.
Diversification Opportunities for AKRO and Illuvium
Very weak diversification
The 3 months correlation between AKRO and Illuvium is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding AKRO and Illuvium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Illuvium and AKRO 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 AKRO are associated (or correlated) with Illuvium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Illuvium has no effect on the direction of AKRO i.e., AKRO and Illuvium go up and down completely randomly.
Pair Corralation between AKRO and Illuvium
Assuming the 90 days trading horizon AKRO is expected to under-perform the Illuvium. But the crypto coin apears to be less risky and, when comparing its historical volatility, AKRO is 1.34 times less risky than Illuvium. The crypto coin trades about -0.02 of its potential returns per unit of risk. The Illuvium is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,711 in Illuvium on August 23, 2024 and sell it today you would earn a total of 431.00 from holding Illuvium or generate 11.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AKRO vs. Illuvium
Performance |
| Timeline |
| AKRO |
| Illuvium |
AKRO and Illuvium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AKRO and Illuvium
The main advantage of trading using opposite AKRO and Illuvium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AKRO position performs unexpectedly, Illuvium 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 Illuvium will offset losses from the drop in Illuvium's long position.The idea behind AKRO and Illuvium 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.Check out your portfolio center.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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |