Correlation Between Chainlink and AKRO
Can any of the company-specific risk be diversified away by investing in both Chainlink and AKRO 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 Chainlink and AKRO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chainlink and AKRO, you can compare the effects of market volatilities on Chainlink and AKRO 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 Chainlink with a short position of AKRO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chainlink and AKRO.
Diversification Opportunities for Chainlink and AKRO
Very good diversification
The 3 months correlation between Chainlink and AKRO is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Chainlink and AKRO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AKRO and Chainlink 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 Chainlink are associated (or correlated) with AKRO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AKRO has no effect on the direction of Chainlink i.e., Chainlink and AKRO go up and down completely randomly.
Pair Corralation between Chainlink and AKRO
Assuming the 90 days trading horizon Chainlink is expected to generate 0.98 times more return on investment than AKRO. However, Chainlink is 1.02 times less risky than AKRO. It trades about -0.04 of its potential returns per unit of risk. AKRO is currently generating about -0.11 per unit of risk. If you would invest 2,044 in Chainlink on November 8, 2024 and sell it today you would lose (185.00) from holding Chainlink or give up 9.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chainlink vs. AKRO
Performance |
| Timeline |
| Chainlink |
| AKRO |
Chainlink and AKRO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chainlink and AKRO
The main advantage of trading using opposite Chainlink and AKRO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chainlink position performs unexpectedly, AKRO 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 AKRO will offset losses from the drop in AKRO's long position.The idea behind Chainlink and AKRO 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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