Correlation Between ARK and Celsius Network

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

Diversification Opportunities for ARK and Celsius Network

0.92
  Correlation Coefficient

Almost no diversification

The 3 months correlation between ARK and Celsius is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding ARK and Celsius Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celsius Network 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 Celsius Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celsius Network has no effect on the direction of ARK i.e., ARK and Celsius Network go up and down completely randomly.

Pair Corralation between ARK and Celsius Network

Assuming the 90 days trading horizon ARK is expected to under-perform the Celsius Network. But the crypto coin apears to be less risky and, when comparing its historical volatility, ARK is 2.09 times less risky than Celsius Network. The crypto coin trades about -0.13 of its potential returns per unit of risk. The Celsius Network is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  326.00  in Celsius Network on March 31, 2022 and sell it today you would lose (226.00)  from holding Celsius Network or give up 69.33% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

ARK  vs.  Celsius Network

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

ARK Price Channel

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

Celsius Price Channel

ARK and Celsius Network Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with ARK and Celsius Network

The main advantage of trading using opposite ARK and Celsius Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARK position performs unexpectedly, Celsius 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 Celsius Network will offset losses from the drop in Celsius Network's long position.
The idea behind ARK and Celsius Network 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.

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