Correlation Between My Neighbor and Arweave

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

Diversification Opportunities for My Neighbor and Arweave

0.98
  Correlation Coefficient

Almost no diversification

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

Pair Corralation between My Neighbor and Arweave

Assuming the 90 days trading horizon My Neighbor Alice is expected to generate 0.99 times more return on investment than Arweave. However, My Neighbor Alice is 1.01 times less risky than Arweave. It trades about -0.13 of its potential returns per unit of risk. Arweave is currently generating about -0.14 per unit of risk. If you would invest  1,364  in My Neighbor Alice on April 2, 2022 and sell it today you would lose (1,140)  from holding My Neighbor Alice or give up 83.58% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

My Neighbor Alice  vs.  Arweave

 Performance (%) 
      Timeline 
My Neighbor Alice 
ALICE Performance
0 of 100
Over the last 90 days My Neighbor Alice 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 My Neighbor Alice investors.

ALICE Price Channel

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

Arweave Price Channel

My Neighbor and Arweave Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with My Neighbor and Arweave

The main advantage of trading using opposite My Neighbor and Arweave positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if My Neighbor position performs unexpectedly, Arweave 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 Arweave will offset losses from the drop in Arweave's long position.
The idea behind My Neighbor Alice and Arweave 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

Other Complementary Tools

Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Go
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Go
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Go
Focused Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Go
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
Go
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Go
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
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
Global Correlations
Find global opportunities by holding instruments from different markets
Go
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Go