Correlation Between Celestia and ANKR
Can any of the company-specific risk be diversified away by investing in both Celestia and ANKR 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 Celestia and ANKR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Celestia and ANKR, you can compare the effects of market volatilities on Celestia and ANKR 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 Celestia with a short position of ANKR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celestia and ANKR.
Diversification Opportunities for Celestia and ANKR
Poor diversification
The 3 months correlation between Celestia and ANKR is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Celestia and ANKR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANKR and Celestia 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 Celestia are associated (or correlated) with ANKR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANKR has no effect on the direction of Celestia i.e., Celestia and ANKR go up and down completely randomly.
Pair Corralation between Celestia and ANKR
Assuming the 90 days trading horizon Celestia is expected to generate 1.43 times more return on investment than ANKR. However, Celestia is 1.43 times more volatile than ANKR. It trades about 0.24 of its potential returns per unit of risk. ANKR is currently generating about 0.32 per unit of risk. If you would invest 528.00 in Celestia on August 28, 2024 and sell it today you would earn a total of 252.00 from holding Celestia or generate 47.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Celestia vs. ANKR
Performance |
| Timeline |
| Celestia |
| ANKR |
Celestia and ANKR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Celestia and ANKR
The main advantage of trading using opposite Celestia and ANKR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celestia position performs unexpectedly, ANKR 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 ANKR will offset losses from the drop in ANKR's long position.The idea behind Celestia and ANKR 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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