Correlation Between New Generation and Arsenal Digital
Can any of the company-specific risk be diversified away by investing in both New Generation and Arsenal Digital 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 New Generation and Arsenal Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Generation Consumer and Arsenal Digital Holdings, you can compare the effects of market volatilities on New Generation and Arsenal Digital 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 New Generation with a short position of Arsenal Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Generation and Arsenal Digital.
Diversification Opportunities for New Generation and Arsenal Digital
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between New and Arsenal is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding New Generation Consumer and Arsenal Digital Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arsenal Digital Holdings and New Generation 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 New Generation Consumer are associated (or correlated) with Arsenal Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arsenal Digital Holdings has no effect on the direction of New Generation i.e., New Generation and Arsenal Digital go up and down completely randomly.
Pair Corralation between New Generation and Arsenal Digital
Given the investment horizon of 90 days New Generation is expected to generate 12.86 times less return on investment than Arsenal Digital. In addition to that, New Generation is 1.12 times more volatile than Arsenal Digital Holdings. It trades about 0.01 of its total potential returns per unit of risk. Arsenal Digital Holdings is currently generating about 0.17 per unit of volatility. If you would invest 5.61 in Arsenal Digital Holdings on November 3, 2024 and sell it today you would earn a total of 2.02 from holding Arsenal Digital Holdings or generate 36.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
New Generation Consumer vs. Arsenal Digital Holdings
Performance |
| Timeline |
| New Generation Consumer |
| Arsenal Digital Holdings |
New Generation and Arsenal Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Generation and Arsenal Digital
The main advantage of trading using opposite New Generation and Arsenal Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Generation position performs unexpectedly, Arsenal Digital 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 Arsenal Digital will offset losses from the drop in Arsenal Digital's long position.| New Generation vs. Xtra Energy Corp | New Generation vs. Arsenal Digital Holdings | New Generation vs. UHF Logistics Group | New Generation vs. XCana Petroleum |
| Arsenal Digital vs. PT Astra International | Arsenal Digital vs. Adia Nutrition | Arsenal Digital vs. Bullet Blockchain | Arsenal Digital vs. Adhi Karya Persero |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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