Correlation Between Siren Nasdaq and ARK 21Shares
Can any of the company-specific risk be diversified away by investing in both Siren Nasdaq and ARK 21Shares 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 Siren Nasdaq and ARK 21Shares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siren Nasdaq NexGen and ARK 21Shares Active, you can compare the effects of market volatilities on Siren Nasdaq and ARK 21Shares 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 Siren Nasdaq with a short position of ARK 21Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siren Nasdaq and ARK 21Shares.
Diversification Opportunities for Siren Nasdaq and ARK 21Shares
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Siren and ARK is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Siren Nasdaq NexGen and ARK 21Shares Active in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARK 21Shares Active and Siren Nasdaq 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 Siren Nasdaq NexGen are associated (or correlated) with ARK 21Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARK 21Shares Active has no effect on the direction of Siren Nasdaq i.e., Siren Nasdaq and ARK 21Shares go up and down completely randomly.
Pair Corralation between Siren Nasdaq and ARK 21Shares
Given the investment horizon of 90 days Siren Nasdaq is expected to generate 2.73 times less return on investment than ARK 21Shares. But when comparing it to its historical volatility, Siren Nasdaq NexGen is 1.02 times less risky than ARK 21Shares. It trades about 0.09 of its potential returns per unit of risk. ARK 21Shares Active is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 2,993 in ARK 21Shares Active on August 26, 2024 and sell it today you would earn a total of 1,408 from holding ARK 21Shares Active or generate 47.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siren Nasdaq NexGen vs. ARK 21Shares Active
Performance |
| Timeline |
| Siren Nasdaq NexGen |
| ARK 21Shares Active |
Siren Nasdaq and ARK 21Shares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siren Nasdaq and ARK 21Shares
The main advantage of trading using opposite Siren Nasdaq and ARK 21Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siren Nasdaq position performs unexpectedly, ARK 21Shares 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 ARK 21Shares will offset losses from the drop in ARK 21Shares' long position.| Siren Nasdaq vs. Grayscale Bitcoin Trust | Siren Nasdaq vs. Grayscale Bitcoin Mini | Siren Nasdaq vs. First Trust SkyBridge |
| ARK 21Shares vs. Grayscale Bitcoin Trust | ARK 21Shares vs. Siren Nasdaq NexGen | ARK 21Shares vs. Grayscale Bitcoin Mini | ARK 21Shares vs. First Trust SkyBridge |
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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