Correlation Between ABBC Coin and Centrality Token

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

Diversification Opportunities for ABBC Coin and Centrality Token

0.51
  Correlation Coefficient

Very weak diversification

The 3 months correlation between ABBC Coin and Centrality is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding ABBC Coin and Centrality Token in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centrality Token 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 Centrality Token. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centrality Token has no effect on the direction of ABBC Coin i.e., ABBC Coin and Centrality Token go up and down completely randomly.

Pair Corralation between ABBC Coin and Centrality Token

Assuming the 90 days trading horizon ABBC Coin is expected to under-perform the Centrality Token. But the crypto coin apears to be less risky and, when comparing its historical volatility, ABBC Coin is 3.37 times less risky than Centrality Token. The crypto coin trades about -0.03 of its potential returns per unit of risk. The Centrality Token is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  10.00  in Centrality Token on February 19, 2022 and sell it today you would lose (2.79)  from holding Centrality Token or give up 27.9% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

ABBC Coin  vs.  Centrality Token

 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 weak performance in the last few months, the Crypto's fundamental drivers 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 ABBC Coin investors.

ABBC Coin Price Channel

Centrality Token 
Centrality Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Centrality Token are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Centrality Token sustained solid returns over the last few months and may actually be approaching a breakup point.

Centrality Price Channel

ABBC Coin and Centrality Token Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with ABBC Coin and Centrality Token

The main advantage of trading using opposite ABBC Coin and Centrality Token positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABBC Coin position performs unexpectedly, Centrality Token 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 Centrality Token will offset losses from the drop in Centrality Token's long position.
The idea behind ABBC Coin and Centrality Token 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

Other Complementary Tools

Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios
Go
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Go
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
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
Go
Focused Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Go
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Go
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Go