Correlation Between AdEx and Brazilian Digital

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

Diversification Opportunities for AdEx and Brazilian Digital

-0.41
  Correlation Coefficient

Very good diversification

The 3 months correlation between AdEx and Brazilian is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding AdEx and Brazilian Digital Token in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brazilian Digital Token and AdEx 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 AdEx are associated (or correlated) with Brazilian Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brazilian Digital Token has no effect on the direction of AdEx i.e., AdEx and Brazilian Digital go up and down completely randomly.

Pair Corralation between AdEx and Brazilian Digital

Assuming the 90 days trading horizon AdEx is expected to under-perform the Brazilian Digital. But the crypto coin apears to be less risky and, when comparing its historical volatility, AdEx is 6.04 times less risky than Brazilian Digital. The crypto coin trades about -0.01 of its potential returns per unit of risk. The Brazilian Digital Token is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  16.00  in Brazilian Digital Token on February 24, 2022 and sell it today you would earn a total of  10.00  from holding Brazilian Digital Token or generate 62.5% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy97.39%
ValuesDaily Returns

AdEx  vs.  Brazilian Digital Token

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

AdEx Price Channel

Brazilian Digital Token 
Brazilian Performance
9 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Brazilian Digital Token are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Brazilian Digital sustained solid returns over the last few months and may actually be approaching a breakup point.

Brazilian Price Channel

AdEx and Brazilian Digital Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with AdEx and Brazilian Digital

The main advantage of trading using opposite AdEx and Brazilian Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AdEx position performs unexpectedly, Brazilian Digital 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 Brazilian Digital will offset losses from the drop in Brazilian Digital's long position.
The idea behind AdEx and Brazilian Digital 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.

Other Complementary Tools

Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
Go
Risk-Return Analysis
View associations between returns expected from investment and the risk you assume
Go
Probability Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
Go
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Go
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Go
Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Go
Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Go
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Go
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Go
Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go