Correlation Between Aave and Bezop

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Aave and Bezop 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 Aave and Bezop into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aave and Bezop, you can compare the effects of market volatilities on Aave and Bezop 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 Aave with a short position of Bezop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aave and Bezop.

Diversification Opportunities for Aave and Bezop

0.96
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Aave and Bezop is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Aave and Bezop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bezop and Aave 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 Aave are associated (or correlated) with Bezop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bezop has no effect on the direction of Aave i.e., Aave and Bezop go up and down completely randomly.

Pair Corralation between Aave and Bezop

Assuming the 90 days trading horizon Aave is expected to under-perform the Bezop. But the crypto coin apears to be less risky and, when comparing its historical volatility, Aave is 1.31 times less risky than Bezop. The crypto coin trades about -0.07 of its potential returns per unit of risk. The Bezop is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  0.44  in Bezop on April 7, 2022 and sell it today you would lose (0.20)  from holding Bezop or give up 44.77% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy99.46%
ValuesDaily Returns

Aave  vs.  Bezop

 Performance (%) 
      Timeline 
Aave 
Aave Performance
0 of 100
Over the last 90 days Aave has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Crypto's basic indicators remain somewhat strong which may send shares a bit higher in August 2022. The current disturbance may also be a sign of long term up-swing for Aave investors.

Aave Price Channel

Bezop 
Bezop Performance
0 of 100
Over the last 90 days Bezop has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Crypto's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in August 2022. The current disturbance may also be a sign of long term up-swing for Bezop investors.

Bezop Price Channel

Aave and Bezop Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Aave and Bezop

The main advantage of trading using opposite Aave and Bezop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aave position performs unexpectedly, Bezop 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 Bezop will offset losses from the drop in Bezop's long position.
The idea behind Aave and Bezop 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

Other Complementary Tools

Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Go
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Go
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Go
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
Go
ETF Directory
Find actively traded Exchange Traded Funds (ETF) from around the world
Go
Money Managers
Screen money managers from public funds and ETFs managed around the world
Go
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Go
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Go
Bond Directory
Find actively traded corporate debentures issued by US companies
Go
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Go
Fundamental Analysis
View fundamental data based on most recent published financial statements
Go
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Go