Correlation Between Altus Power and Balancer

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

Diversification Opportunities for Altus Power and Balancer

-0.14
  Correlation Coefficient

Good diversification

The 3 months correlation between Altus and Balancer is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Altus Power and Balancer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balancer and Altus Power 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 Altus Power are associated (or correlated) with Balancer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balancer has no effect on the direction of Altus Power i.e., Altus Power and Balancer go up and down completely randomly.

Pair Corralation between Altus Power and Balancer

Given the investment horizon of 90 days Altus Power is expected to generate 0.75 times more return on investment than Balancer. However, Altus Power is 1.33 times less risky than Balancer. It trades about -0.01 of its potential returns per unit of risk. Balancer is currently generating about -0.02 per unit of risk. If you would invest  967.00  in Altus Power on September 9, 2022 and sell it today you would lose (325.50)  from holding Altus Power or give up 33.66% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy96.53%
ValuesDaily Returns

Altus Power  vs.  Balancer

 Performance (%) 
       Timeline  
Altus Power 
Altus Performance
0 of 100
Over the last 90 days Altus Power has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Etf's basic indicators remain relatively invariable which may send shares a bit higher in January 2023. The latest agitation may also be a sign of long-running up-swing for the ETF retail investors.

Altus Price Channel

Balancer 
Balancer Performance
0 of 100
Over the last 90 days Balancer 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 January 2023. The current disturbance may also be a sign of long term up-swing for Balancer investors.

Balancer Price Channel

Altus Power and Balancer Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Altus Power and Balancer

The main advantage of trading using opposite Altus Power and Balancer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altus Power position performs unexpectedly, Balancer 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 Balancer will offset losses from the drop in Balancer's long position.
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The idea behind Altus Power and Balancer 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.
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.

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