Correlation Between ARK and Auction

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

Diversification Opportunities for ARK and Auction

0.97
  Correlation Coefficient

Almost no diversification

The 3 months correlation between ARK and Auction is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding ARK and Auction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auction 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 Auction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auction has no effect on the direction of ARK i.e., ARK and Auction go up and down completely randomly.

Pair Corralation between ARK and Auction

Assuming the 90 days trading horizon ARK is expected to generate 0.82 times more return on investment than Auction. However, ARK is 1.22 times less risky than Auction. It trades about -0.07 of its potential returns per unit of risk. Auction is currently generating about -0.1 per unit of risk. If you would invest  169.00  in ARK on April 7, 2022 and sell it today you would lose (127.00)  from holding ARK or give up 75.15% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

ARK  vs.  Auction

 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

Auction 
Auction Performance
0 of 100
Over the last 90 days Auction 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 forward indicators remain quite persistent which may send shares a bit higher in August 2022. The latest mess may also be a sign of long-standing up-swing for Auction institutional investors.

Auction Price Channel

ARK and Auction Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with ARK and Auction

The main advantage of trading using opposite ARK and Auction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARK position performs unexpectedly, Auction 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 Auction will offset losses from the drop in Auction's long position.
The idea behind ARK and Auction 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

Other Complementary Tools

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
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Go
Probability Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
Go
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Go
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Go
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Go
Fundamental Analysis
View fundamental data based on most recent published financial statements
Go
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Go