Correlation Between AERGO and ARK

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

Diversification Opportunities for AERGO and ARK

0.94
  Correlation Coefficient

Almost no diversification

The 3 months correlation between AERGO and ARK is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding AERGO and ARK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARK 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 ARK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARK has no effect on the direction of AERGO i.e., AERGO and ARK go up and down completely randomly.

Pair Corralation between AERGO and ARK

Assuming the 90 days trading horizon AERGO is expected to generate 1.17 times more return on investment than ARK. However, AERGO is 1.17 times more volatile than ARK. It trades about -0.05 of its potential returns per unit of risk. ARK is currently generating about -0.12 per unit of risk. If you would invest  36.00  in AERGO on February 19, 2022 and sell it today you would lose (22.00)  from holding AERGO or give up 61.11% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

AERGO  vs.  ARK

 Performance (%) 
      Timeline 
AERGO 
AERGO Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in AERGO are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, AERGO may actually be approaching a critical reversion point that can send shares even higher in June 2022.

AERGO Price Channel

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

ARK Price Channel

AERGO and ARK Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with AERGO and ARK

The main advantage of trading using opposite AERGO and ARK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AERGO position performs unexpectedly, ARK 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 ARK will offset losses from the drop in ARK's long position.
The idea behind AERGO and ARK 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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