Correlation Between ABBC Coin and Alephim

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

Diversification Opportunities for ABBC Coin and Alephim

0.3
  Correlation Coefficient

Weak diversification

The 3 months correlation between ABBC Coin and Alephim is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding ABBC Coin and Aleph.im in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Alephim and ABBC Coin 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 ABBC Coin are associated (or correlated) with Alephim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alephim has no effect on the direction of ABBC Coin i.e., ABBC Coin and Alephim go up and down completely randomly.

Pair Corralation between ABBC Coin and Alephim

Assuming the 90 days trading horizon ABBC Coin is expected to generate 1.1 times more return on investment than Alephim. However, ABBC Coin is 1.1 times more volatile than Alephim. It trades about 0.02 of its potential returns per unit of risk. Alephim is currently generating about -0.02 per unit of risk. If you would invest  11.00  in ABBC Coin on February 17, 2022 and sell it today you would lose (1.77)  from holding ABBC Coin or give up 16.09% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy99.34%
ValuesDaily Returns

ABBC Coin  vs.  Aleph.im

 Performance (%) 
      Timeline 
ABBC Coin 
ABBC Coin Performance
0 of 100
Over the last 90 days ABBC Coin has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, ABBC Coin is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

ABBC Coin Price Channel

Alephim 
Alephim Performance
0 of 100
Over the last 90 days Alephim 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 June 2022. The current disturbance may also be a sign of long term up-swing for Alephim investors.

Alephim Price Channel

ABBC Coin and Alephim Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with ABBC Coin and Alephim

The main advantage of trading using opposite ABBC Coin and Alephim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABBC Coin position performs unexpectedly, Alephim 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 Alephim will offset losses from the drop in Alephim's long position.
The idea behind ABBC Coin and Alephim 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

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