Correlation Between Automata and Alpaca Finance

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

Diversification Opportunities for Automata and Alpaca Finance

0.35
  Correlation Coefficient

Weak diversification

The 3 months correlation between Automata and Alpaca is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Automata and Alpaca Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpaca Finance and Automata 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 Automata are associated (or correlated) with Alpaca Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpaca Finance has no effect on the direction of Automata i.e., Automata and Alpaca Finance go up and down completely randomly.

Pair Corralation between Automata and Alpaca Finance

Assuming the 90 days trading horizon Automata is expected to generate 16.44 times more return on investment than Alpaca Finance. However, Automata is 16.44 times more volatile than Alpaca Finance. It trades about 0.11 of its potential returns per unit of risk. Alpaca Finance is currently generating about -0.07 per unit of risk. If you would invest  0.00  in Automata on April 8, 2022 and sell it today you would earn a total of  16.00  from holding Automata or generate 9.223372036854776E16% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy39.78%
ValuesDaily Returns

Automata  vs.  Alpaca Finance

 Performance (%) 
      Timeline 
Automata 
Automata Performance
9 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Automata are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Automata sustained solid returns over the last few months and may actually be approaching a breakup point.

Automata Price Channel

Alpaca Finance 
Alpaca Performance
0 of 100
Over the last 90 days Alpaca Finance 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 Alpaca Finance investors.

Alpaca Price Channel

Automata and Alpaca Finance Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Automata and Alpaca Finance

The main advantage of trading using opposite Automata and Alpaca Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automata position performs unexpectedly, Alpaca Finance 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 Alpaca Finance will offset losses from the drop in Alpaca Finance's long position.
The idea behind Automata and Alpaca Finance 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 Anywhere module to track or share privately all of your investments from the convenience of any device.

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