Correlation Between AllianceBlock and Chroma

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

Diversification Opportunities for AllianceBlock and Chroma

0.98
  Correlation Coefficient

Almost no diversification

The 3 months correlation between AllianceBlock and Chroma is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding AllianceBlock and Chroma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chroma and AllianceBlock 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 AllianceBlock are associated (or correlated) with Chroma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chroma has no effect on the direction of AllianceBlock i.e., AllianceBlock and Chroma go up and down completely randomly.

Pair Corralation between AllianceBlock and Chroma

Assuming the 90 days trading horizon AllianceBlock is expected to under-perform the Chroma. But the crypto coin apears to be less risky and, when comparing its historical volatility, AllianceBlock is 1.37 times less risky than Chroma. The crypto coin trades about -0.18 of its potential returns per unit of risk. The Chroma is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  35.00  in Chroma on April 7, 2022 and sell it today you would lose (17.00)  from holding Chroma or give up 48.57% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy62.16%
ValuesDaily Returns

AllianceBlock  vs.  Chroma

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

AllianceBlock Price Channel

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

Chroma Price Channel

AllianceBlock and Chroma Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with AllianceBlock and Chroma

The main advantage of trading using opposite AllianceBlock and Chroma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AllianceBlock position performs unexpectedly, Chroma 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 Chroma will offset losses from the drop in Chroma's long position.
The idea behind AllianceBlock and Chroma 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

Other Complementary Tools

Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
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
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Go
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Go
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Go
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Go
Price Transformation
Use Price Transformation models to analyze depth of different equity instruments across global markets
Go