Correlation Between ABBC Coin and BORA

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

Diversification Opportunities for ABBC Coin and BORA

0.64
  Correlation Coefficient

Poor diversification

The 3 months correlation between ABBC Coin and BORA is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding ABBC Coin and BORA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BORA 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 BORA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BORA has no effect on the direction of ABBC Coin i.e., ABBC Coin and BORA go up and down completely randomly.

Pair Corralation between ABBC Coin and BORA

Assuming the 90 days trading horizon ABBC Coin is expected to generate 7.25 times less return on investment than BORA. But when comparing it to its historical volatility, ABBC Coin is 2.39 times less risky than BORA. It trades about 0.02 of its potential returns per unit of risk. BORA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  20.00  in BORA on February 21, 2022 and sell it today you would earn a total of  14.00  from holding BORA or generate 70.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy96.77%
ValuesDaily Returns

ABBC Coin  vs.  BORA

 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

BORA 
BORA Performance
0 of 100
Over the last 90 days BORA 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 BORA investors.

BORA Price Channel

ABBC Coin and BORA Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with ABBC Coin and BORA

The main advantage of trading using opposite ABBC Coin and BORA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABBC Coin position performs unexpectedly, BORA 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 BORA will offset losses from the drop in BORA's long position.
The idea behind ABBC Coin and BORA 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

Other Complementary Tools

Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Go
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Go
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Go
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Go
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Go
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
Go