Correlation Between AERGO and Beta Finance

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

Diversification Opportunities for AERGO and Beta Finance

0.51
  Correlation Coefficient

Very weak diversification

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

Pair Corralation between AERGO and Beta Finance

Assuming the 90 days trading horizon AERGO is expected to generate 0.7 times more return on investment than Beta Finance. However, AERGO is 1.42 times less risky than Beta Finance. It trades about -0.22 of its potential returns per unit of risk. Beta Finance is currently generating about -0.42 per unit of risk. If you would invest  24.00  in AERGO on February 16, 2022 and sell it today you would lose (10.00)  from holding AERGO or give up 41.67% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

AERGO  vs.  Beta Finance

 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

Beta Finance 
Beta Finance Performance
0 of 100
Over the last 90 days Beta Finance 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 Beta Finance investors.

Beta Finance Price Channel

AERGO and Beta Finance Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with AERGO and Beta Finance

The main advantage of trading using opposite AERGO and Beta Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AERGO position performs unexpectedly, Beta Finance 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 Beta Finance will offset losses from the drop in Beta Finance's long position.
The idea behind AERGO and Beta Finance 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

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