Correlation Between AERGO and Ardor

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

Diversification Opportunities for AERGO and Ardor

0.99
  Correlation Coefficient

No risk reduction

The 3 months correlation between AERGO and Ardor is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding AERGO and Ardor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ardor and AERGO 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 AERGO are associated (or correlated) with Ardor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ardor has no effect on the direction of AERGO i.e., AERGO and Ardor go up and down completely randomly.

Pair Corralation between AERGO and Ardor

Assuming the 90 days trading horizon AERGO is expected to generate 1.15 times more return on investment than Ardor. However, AERGO is 1.15 times more volatile than Ardor. It trades about -0.07 of its potential returns per unit of risk. Ardor is currently generating about -0.09 per unit of risk. If you would invest  19.00  in AERGO on April 6, 2022 and sell it today you would lose (7.00)  from holding AERGO or give up 36.84% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

AERGO  vs.  Ardor

 Performance (%) 
      Timeline 
AERGO 
AERGO Performance
0 of 100
Over the last 90 days AERGO 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 AERGO investors.

AERGO Price Channel

Ardor 
Ardor Performance
0 of 100
Over the last 90 days Ardor 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 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 Ardor investors.

Ardor Price Channel

AERGO and Ardor Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with AERGO and Ardor

The main advantage of trading using opposite AERGO and Ardor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AERGO position performs unexpectedly, Ardor 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 Ardor will offset losses from the drop in Ardor's long position.
The idea behind AERGO and Ardor 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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