Correlation Between My Neighbor and Balancer

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

Diversification Opportunities for My Neighbor and Balancer

0.53
  Correlation Coefficient

Very weak diversification

The 3 months correlation between ALICE and Balancer is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding My Neighbor Alice and Balancer in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Balancer and My Neighbor 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 My Neighbor Alice are associated (or correlated) with Balancer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balancer has no effect on the direction of My Neighbor i.e., My Neighbor and Balancer go up and down completely randomly.

Pair Corralation between My Neighbor and Balancer

Assuming the 90 days trading horizon My Neighbor Alice is expected to under-perform the Balancer. In addition to that, My Neighbor is 1.33 times more volatile than Balancer. It trades about -0.08 of its total potential returns per unit of risk. Balancer is currently generating about -0.06 per unit of volatility. If you would invest  2,220  in Balancer on February 16, 2022 and sell it today you would lose (1,283)  from holding Balancer or give up 57.79% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

My Neighbor Alice  vs.  Balancer

 Performance (%) 
      Timeline 
My Neighbor Alice 
ALICE Performance
0 of 100
Over the last 90 days My Neighbor Alice 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 My Neighbor Alice investors.

ALICE Price Channel

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

Balancer Price Channel

My Neighbor and Balancer Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with My Neighbor and Balancer

The main advantage of trading using opposite My Neighbor and Balancer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if My Neighbor position performs unexpectedly, Balancer 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 Balancer will offset losses from the drop in Balancer's long position.
The idea behind My Neighbor Alice and Balancer 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

Other Complementary Tools

Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Go
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Go
Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Go
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Go
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Go
ETF Directory
Find actively traded Exchange Traded Funds (ETF) from around the world
Go
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Go