Correlation Between Ardor and AERGO

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

Diversification Opportunities for Ardor and AERGO

0.99
  Correlation Coefficient

No risk reduction

The 3 months correlation between Ardor and AERGO is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Ardor and AERGO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AERGO and Ardor 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 Ardor are associated (or correlated) with AERGO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AERGO has no effect on the direction of Ardor i.e., Ardor and AERGO go up and down completely randomly.

Pair Corralation between Ardor and AERGO

Assuming the 90 days trading horizon Ardor is expected to generate 0.71 times more return on investment than AERGO. However, Ardor is 1.4 times less risky than AERGO. It trades about -0.1 of its potential returns per unit of risk. AERGO is currently generating about -0.1 per unit of risk. If you would invest  12.00  in Ardor on March 29, 2022 and sell it today you would lose (2.00)  from holding Ardor or give up 16.67% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Ardor  vs.  AERGO

 Performance (%) 
      Timeline 
Ardor 
Ardor Performance
0 of 100
Over the last 90 days Ardor 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 July 2022. The current disturbance may also be a sign of long term up-swing for Ardor investors.

Ardor Price Channel

AERGO 
AERGO Performance
0 of 100
Over the last 90 days AERGO 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 and fundamental indicators remain somewhat strong which may send shares a bit higher in July 2022. The current disturbance may also be a sign of long term up-swing for AERGO investors.

AERGO Price Channel

Ardor and AERGO Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Ardor and AERGO

The main advantage of trading using opposite Ardor and AERGO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ardor position performs unexpectedly, AERGO 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 AERGO will offset losses from the drop in AERGO's long position.
The idea behind Ardor and AERGO 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

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