Correlation Between AERGO and Audius

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

Diversification Opportunities for AERGO and Audius

0.96
  Correlation Coefficient

Almost no diversification

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

Pair Corralation between AERGO and Audius

Assuming the 90 days trading horizon AERGO is expected to generate 0.89 times more return on investment than Audius. However, AERGO is 1.12 times less risky than Audius. It trades about -0.02 of its potential returns per unit of risk. Audius is currently generating about -0.06 per unit of risk. If you would invest  30.00  in AERGO on April 8, 2022 and sell it today you would lose (17.00)  from holding AERGO or give up 56.67% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

AERGO  vs.  Audius

 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

Audius 
Audius Performance
0 of 100
Over the last 90 days Audius 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 forward 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 Audius investors.

Audius Price Channel

AERGO and Audius Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with AERGO and Audius

The main advantage of trading using opposite AERGO and Audius positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AERGO position performs unexpectedly, Audius 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 Audius will offset losses from the drop in Audius' long position.
The idea behind AERGO and Audius 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

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