Correlation Between Alpaca Finance and Automata

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

Diversification Opportunities for Alpaca Finance and Automata

0.35
  Correlation Coefficient

Weak diversification

The 3 months correlation between Alpaca and Automata is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Alpaca Finance and Automata in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automata and Alpaca Finance 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 Alpaca Finance are associated (or correlated) with Automata. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automata has no effect on the direction of Alpaca Finance i.e., Alpaca Finance and Automata go up and down completely randomly.

Pair Corralation between Alpaca Finance and Automata

Assuming the 90 days trading horizon Alpaca Finance is expected to under-perform the Automata. But the crypto coin apears to be less risky and, when comparing its historical volatility, Alpaca Finance is 16.44 times less risky than Automata. The crypto coin trades about -0.07 of its potential returns per unit of risk. The Automata is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Automata on April 8, 2022 and sell it today you would earn a total of  16.00  from holding Automata or generate 9.223372036854776E16% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy39.78%
ValuesDaily Returns

Alpaca Finance  vs.  Automata

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

Alpaca Price Channel

Automata 
Automata Performance
9 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Automata are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Automata sustained solid returns over the last few months and may actually be approaching a breakup point.

Automata Price Channel

Alpaca Finance and Automata Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Alpaca Finance and Automata

The main advantage of trading using opposite Alpaca Finance and Automata positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpaca Finance position performs unexpectedly, Automata 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 Automata will offset losses from the drop in Automata's long position.
The idea behind Alpaca Finance and Automata 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 Analyst Recommendations module to analyst recommendations and target price estimates broken down by several categories.

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