Correlation Between Taoping and Arax Holdings
Can any of the company-specific risk be diversified away by investing in both Taoping and Arax Holdings 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 Taoping and Arax Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taoping and Arax Holdings Corp, you can compare the effects of market volatilities on Taoping and Arax Holdings 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 Taoping with a short position of Arax Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taoping and Arax Holdings.
Diversification Opportunities for Taoping and Arax Holdings
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Taoping and Arax is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Taoping and Arax Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arax Holdings Corp and Taoping 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 Taoping are associated (or correlated) with Arax Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arax Holdings Corp has no effect on the direction of Taoping i.e., Taoping and Arax Holdings go up and down completely randomly.
Pair Corralation between Taoping and Arax Holdings
Given the investment horizon of 90 days Taoping is expected to under-perform the Arax Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Taoping is 4.38 times less risky than Arax Holdings. The stock trades about -0.06 of its potential returns per unit of risk. The Arax Holdings Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 15.00 in Arax Holdings Corp on September 2, 2024 and sell it today you would earn a total of 39.00 from holding Arax Holdings Corp or generate 260.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taoping vs. Arax Holdings Corp
Performance |
| Timeline |
| Taoping |
| Arax Holdings Corp |
Taoping and Arax Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taoping and Arax Holdings
The main advantage of trading using opposite Taoping and Arax Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taoping position performs unexpectedly, Arax Holdings 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 Arax Holdings will offset losses from the drop in Arax Holdings' long position.| Taoping vs. TonnerOne World Holdings | Taoping vs. Global Blue Group | Taoping vs. Bridgeline Digital | Taoping vs. Cerberus Cyber Sentinel |
| Arax Holdings vs. AppTech Payments Corp | Arax Holdings vs. Arbe Robotics Ltd | Arax Holdings vs. Argentum 47 | Arax Holdings vs. Internet Infinity |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |