Correlation Between ARK Autonomous and CHIR
Can any of the company-specific risk be diversified away by investing in both ARK Autonomous and CHIR 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 ARK Autonomous and CHIR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ARK Autonomous Technology and CHIR, you can compare the effects of market volatilities on ARK Autonomous and CHIR 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 ARK Autonomous with a short position of CHIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARK Autonomous and CHIR.
Diversification Opportunities for ARK Autonomous and CHIR
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ARK and CHIR is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding ARK Autonomous Technology and CHIR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHIR and ARK Autonomous 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 ARK Autonomous Technology are associated (or correlated) with CHIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHIR has no effect on the direction of ARK Autonomous i.e., ARK Autonomous and CHIR go up and down completely randomly.
Pair Corralation between ARK Autonomous and CHIR
Given the investment horizon of 90 days ARK Autonomous Technology is expected to generate 0.73 times more return on investment than CHIR. However, ARK Autonomous Technology is 1.37 times less risky than CHIR. It trades about 0.08 of its potential returns per unit of risk. CHIR is currently generating about -0.08 per unit of risk. If you would invest 4,478 in ARK Autonomous Technology on October 9, 2024 and sell it today you would earn a total of 3,797 from holding ARK Autonomous Technology or generate 84.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 26.26% |
| Values | Daily Returns |
ARK Autonomous Technology vs. CHIR
Performance |
| Timeline |
| ARK Autonomous Technology |
| CHIR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ARK Autonomous and CHIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARK Autonomous and CHIR
The main advantage of trading using opposite ARK Autonomous and CHIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARK Autonomous position performs unexpectedly, CHIR 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 CHIR will offset losses from the drop in CHIR's long position.| ARK Autonomous vs. ARK Fintech Innovation | ARK Autonomous vs. ARK Next Generation | ARK Autonomous vs. ARK Genomic Revolution | ARK Autonomous vs. ARK Innovation ETF |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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