Correlation Between Chainlink and AURO
Can any of the company-specific risk be diversified away by investing in both Chainlink and AURO 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 AURO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chainlink and AURO, you can compare the effects of market volatilities on Chainlink and AURO 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 AURO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chainlink and AURO.
Diversification Opportunities for Chainlink and AURO
Almost no diversification
The 3 months correlation between Chainlink and AURO is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Chainlink and AURO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AURO 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 AURO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AURO has no effect on the direction of Chainlink i.e., Chainlink and AURO go up and down completely randomly.
Pair Corralation between Chainlink and AURO
Assuming the 90 days trading horizon Chainlink is expected to generate 1.2 times more return on investment than AURO. However, Chainlink is 1.2 times more volatile than AURO. It trades about 0.06 of its potential returns per unit of risk. AURO is currently generating about 0.05 per unit of risk. If you would invest 714.00 in Chainlink on August 24, 2024 and sell it today you would earn a total of 781.00 from holding Chainlink or generate 109.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chainlink vs. AURO
Performance |
| Timeline |
| Chainlink |
| AURO |
Chainlink and AURO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chainlink and AURO
The main advantage of trading using opposite Chainlink and AURO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chainlink position performs unexpectedly, AURO 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 AURO will offset losses from the drop in AURO's long position.The idea behind Chainlink and AURO 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |