Correlation Between Altus Power and Bancor Network

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

Diversification Opportunities for Altus Power and Bancor Network

0.64
  Correlation Coefficient

Poor diversification

The 3 months correlation between Altus and Bancor is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Altus Power and Bancor Network Token in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bancor Network Token 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 Bancor Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bancor Network Token has no effect on the direction of Altus Power i.e., Altus Power and Bancor Network go up and down completely randomly.

Pair Corralation between Altus Power and Bancor Network

Given the investment horizon of 90 days Altus Power is expected to generate 0.78 times more return on investment than Bancor Network. However, Altus Power is 1.29 times less risky than Bancor Network. It trades about -0.01 of its potential returns per unit of risk. Bancor Network Token is currently generating about -0.14 per unit of risk. If you would invest  1,049  in Altus Power on September 7, 2022 and sell it today you would lose (364.00)  from holding Altus Power or give up 34.7% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy63.09%
ValuesDaily Returns

Altus Power  vs.  Bancor Network Token

 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

Bancor Network Token 
Bancor Performance
0 of 100
Over the last 90 days Bancor Network Token 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 Bancor Network Token investors.

Bancor Price Channel

Altus Power and Bancor Network Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Altus Power and Bancor Network

The main advantage of trading using opposite Altus Power and Bancor Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altus Power position performs unexpectedly, Bancor Network 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 Bancor Network will offset losses from the drop in Bancor Network's long position.
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Altus Power as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Altus Power's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Altus Power's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Altus Power.
The idea behind Altus Power and Bancor Network Token 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.
Bancor Network vs. XRP
Bancor Network vs. Polygon
Bancor Network vs. Solana
Bancor Network vs. Chainlink
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

Other Complementary Tools

Global Correlations
Find global opportunities by holding instruments from different markets
Go
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Go
Focused Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Go
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Go
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Go
Transaction History
View history of all your transactions and understand their impact on performance
Go
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Go
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Go
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Go
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Go