Correlation Between AERGO and Anchor Protocol

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

Diversification Opportunities for AERGO and Anchor Protocol

0.33
  Correlation Coefficient

Weak diversification

The 3 months correlation between AERGO and Anchor is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding AERGO and Anchor Protocol in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Anchor Protocol and AERGO 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 AERGO are associated (or correlated) with Anchor Protocol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anchor Protocol has no effect on the direction of AERGO i.e., AERGO and Anchor Protocol go up and down completely randomly.

Pair Corralation between AERGO and Anchor Protocol

Assuming the 90 days trading horizon AERGO is expected to under-perform the Anchor Protocol. But the crypto coin apears to be less risky and, when comparing its historical volatility, AERGO is 4.36 times less risky than Anchor Protocol. The crypto coin trades about -0.12 of its potential returns per unit of risk. The Anchor Protocol is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  277.00  in Anchor Protocol on February 16, 2022 and sell it today you would lose (251.00)  from holding Anchor Protocol or give up 90.61% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

AERGO  vs.  Anchor Protocol

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

AERGO Price Channel

Anchor Protocol 
Anchor Performance
0 of 100
Over the last 90 days Anchor Protocol has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat weak basic indicators, Anchor Protocol sustained solid returns over the last few months and may actually be approaching a breakup point.

Anchor Price Channel

AERGO and Anchor Protocol Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with AERGO and Anchor Protocol

The main advantage of trading using opposite AERGO and Anchor Protocol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AERGO position performs unexpectedly, Anchor Protocol 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 Anchor Protocol will offset losses from the drop in Anchor Protocol's long position.
The idea behind AERGO and Anchor Protocol 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.

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