Correlation Between ARK and AERGO

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

Diversification Opportunities for ARK and AERGO

0.99
  Correlation Coefficient

No risk reduction

The 3 months correlation between ARK and AERGO is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding ARK and AERGO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AERGO and ARK 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 ARK 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 ARK i.e., ARK and AERGO go up and down completely randomly.

Pair Corralation between ARK and AERGO

Assuming the 90 days trading horizon ARK is expected to under-perform the AERGO. But the crypto coin apears to be less risky and, when comparing its historical volatility, ARK is 1.15 times less risky than AERGO. The crypto coin trades about -0.07 of its potential returns per unit of risk. The AERGO is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  24.00  in AERGO on April 8, 2022 and sell it today you would lose (11.00)  from holding AERGO or give up 45.83% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

ARK  vs.  AERGO

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

ARK 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 August 2022. The current disturbance may also be a sign of long term up-swing for AERGO investors.

AERGO Price Channel

ARK and AERGO Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with ARK and AERGO

The main advantage of trading using opposite ARK and AERGO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARK 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 ARK 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.

Other Complementary Tools

Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Go
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Go
Fundamental Analysis
View fundamental data based on most recent published financial statements
Go
Fund Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Go
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Go
Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Go
Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Go