Correlation Between Alephim and Badger DAO

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

Diversification Opportunities for Alephim and Badger DAO

0.47
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Alephim and Badger is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Aleph.im and Badger DAO in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Badger DAO and Alephim 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 Alephim are associated (or correlated) with Badger DAO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Badger DAO has no effect on the direction of Alephim i.e., Alephim and Badger DAO go up and down completely randomly.

Pair Corralation between Alephim and Badger DAO

Assuming the 90 days trading horizon Alephim is expected to generate 0.58 times more return on investment than Badger DAO. However, Alephim is 1.72 times less risky than Badger DAO. It trades about -0.26 of its potential returns per unit of risk. Badger DAO is currently generating about -0.16 per unit of risk. If you would invest  74.00  in Alephim on February 15, 2022 and sell it today you would lose (47.00)  from holding Alephim or give up 63.51% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy98.84%
ValuesDaily Returns

Aleph.im  vs.  Badger DAO

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

Alephim Price Channel

Badger DAO 
Badger Performance
0 of 100
Over the last 90 days Badger DAO 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 technical and 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 Badger DAO investors.

Badger Price Channel

Alephim and Badger DAO Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Alephim and Badger DAO

The main advantage of trading using opposite Alephim and Badger DAO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alephim position performs unexpectedly, Badger DAO 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 Badger DAO will offset losses from the drop in Badger DAO's long position.
The idea behind Alephim and Badger DAO 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

Other Complementary Tools

Risk-Return Analysis
View associations between returns expected from investment and the risk you assume
Go
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Go
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Go
Commodity Channel Index
Use Commodity Channel Index to analyze current equity momentum
Go
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Go