Correlation Between Avalanche and Auction

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

Diversification Opportunities for Avalanche and Auction

0.98
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Avalanche and Auction is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Avalanche and Auction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auction and Avalanche 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 Avalanche 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 Avalanche i.e., Avalanche and Auction go up and down completely randomly.

Pair Corralation between Avalanche and Auction

Assuming the 90 days trading horizon Avalanche is expected to generate 0.86 times more return on investment than Auction. However, Avalanche is 1.16 times less risky than Auction. It trades about -0.06 of its potential returns per unit of risk. Auction is currently generating about -0.1 per unit of risk. If you would invest  6,153  in Avalanche on April 2, 2022 and sell it today you would lose (4,510)  from holding Avalanche or give up 73.3% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy99.45%
ValuesDaily Returns

Avalanche  vs.  Auction

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

Avalanche 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

Avalanche and Auction Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Avalanche and Auction

The main advantage of trading using opposite Avalanche and Auction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avalanche 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 Avalanche 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 Anywhere module to track or share privately all of your investments from the convenience of any device.

Other Complementary Tools

Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go
Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Go
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Go
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Go
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Go
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Go
Commodity Channel Index
Use Commodity Channel Index to analyze current equity momentum
Go
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Go
Risk-Return Analysis
View associations between returns expected from investment and the risk you assume
Go