Correlation Between Chia and Affinity World
Can any of the company-specific risk be diversified away by investing in both Chia and Affinity World 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 Chia and Affinity World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chia and Affinity World Leaders, you can compare the effects of market volatilities on Chia and Affinity World 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 Chia with a short position of Affinity World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chia and Affinity World.
Diversification Opportunities for Chia and Affinity World
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chia and Affinity is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Chia and Affinity World Leaders in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affinity World Leaders and Chia 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 Chia are associated (or correlated) with Affinity World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affinity World Leaders has no effect on the direction of Chia i.e., Chia and Affinity World go up and down completely randomly.
Pair Corralation between Chia and Affinity World
Assuming the 90 days trading horizon Chia is expected to under-perform the Affinity World. In addition to that, Chia is 6.71 times more volatile than Affinity World Leaders. It trades about -0.02 of its total potential returns per unit of risk. Affinity World Leaders is currently generating about 0.08 per unit of volatility. If you would invest 2,197 in Affinity World Leaders on November 2, 2024 and sell it today you would earn a total of 890.46 from holding Affinity World Leaders or generate 40.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 60.32% |
| Values | Daily Returns |
Chia vs. Affinity World Leaders
Performance |
| Timeline |
| Chia |
| Affinity World Leaders |
Chia and Affinity World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chia and Affinity World
The main advantage of trading using opposite Chia and Affinity World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia position performs unexpectedly, Affinity World 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 Affinity World will offset losses from the drop in Affinity World's long position.The idea behind Chia and Affinity World Leaders 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.| Affinity World vs. American Century STOXX | Affinity World vs. PIMCO RAFI Dynamic | Affinity World vs. ProShares SP 500 |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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