Correlation Between ABBC Coin and Biswap

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

Diversification Opportunities for ABBC Coin and Biswap

-0.47
  Correlation Coefficient

Very good diversification

The 3 months correlation between ABBC Coin and Biswap is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding ABBC Coin and Biswap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biswap and ABBC Coin 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 ABBC Coin are associated (or correlated) with Biswap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biswap has no effect on the direction of ABBC Coin i.e., ABBC Coin and Biswap go up and down completely randomly.

Pair Corralation between ABBC Coin and Biswap

Assuming the 90 days trading horizon ABBC Coin is expected to generate 0.87 times more return on investment than Biswap. However, ABBC Coin is 1.14 times less risky than Biswap. It trades about -0.21 of its potential returns per unit of risk. Biswap is currently generating about -0.4 per unit of risk. If you would invest  9.22  in ABBC Coin on April 6, 2022 and sell it today you would lose (1.99)  from holding ABBC Coin or give up 21.58% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

ABBC Coin  vs.  Biswap

 Performance (%) 
      Timeline 
ABBC Coin 
ABBC Coin Performance
0 of 100
Over the last 90 days ABBC Coin 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 fundamental drivers 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 ABBC Coin investors.

ABBC Coin Price Channel

Biswap 
Biswap Performance
8 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Biswap are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Biswap sustained solid returns over the last few months and may actually be approaching a breakup point.

Biswap Price Channel

ABBC Coin and Biswap Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with ABBC Coin and Biswap

The main advantage of trading using opposite ABBC Coin and Biswap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABBC Coin position performs unexpectedly, Biswap 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 Biswap will offset losses from the drop in Biswap's long position.
The idea behind ABBC Coin and Biswap 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 Probability Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.

Other Complementary Tools

Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Go
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Go
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Go
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Go
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Go
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Go
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Go
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Go
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Go