Correlation Between ABBC Coin and Stratis

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

Diversification Opportunities for ABBC Coin and Stratis

0.28
  Correlation Coefficient

Modest diversification

The 3 months correlation between ABBC Coin and Stratis is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding ABBC Coin and Stratis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stratis 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 Stratis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stratis has no effect on the direction of ABBC Coin i.e., ABBC Coin and Stratis go up and down completely randomly.

Pair Corralation between ABBC Coin and Stratis

Assuming the 90 days trading horizon ABBC Coin is expected to under-perform the Stratis. In addition to that, ABBC Coin is 1.09 times more volatile than Stratis. It trades about -0.27 of its total potential returns per unit of risk. Stratis is currently generating about -0.09 per unit of volatility. If you would invest  58.00  in Stratis on September 4, 2022 and sell it today you would lose (10.00)  from holding Stratis or give up 17.24% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

ABBC Coin  vs.  Stratis

 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

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

Stratis Price Channel

ABBC Coin and Stratis Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ABBC Coin and Stratis

The main advantage of trading using opposite ABBC Coin and Stratis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABBC Coin position performs unexpectedly, Stratis 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 Stratis will offset losses from the drop in Stratis' long position.
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The idea behind ABBC Coin and Stratis 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.
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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 Fund Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.

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