Correlation Between Alpha Finance and Auction

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

Diversification Opportunities for Alpha Finance and Auction

0.67
  Correlation Coefficient

Poor diversification

The 3 months correlation between Alpha and Auction is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Finance Lab and Auction in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Auction and Alpha Finance 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 Alpha Finance Lab are associated (or correlated) with Auction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auction has no effect on the direction of Alpha Finance i.e., Alpha Finance and Auction go up and down completely randomly.

Pair Corralation between Alpha Finance and Auction

Assuming the 90 days trading horizon Alpha Finance Lab is expected to under-perform the Auction. In addition to that, Alpha Finance is 1.37 times more volatile than Auction. It trades about -0.4 of its total potential returns per unit of risk. Auction is currently generating about -0.46 per unit of volatility. If you would invest  1,373  in Auction on February 16, 2022 and sell it today you would lose (576.00)  from holding Auction or give up 41.95% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy80.95%
ValuesDaily Returns

Alpha Finance Lab  vs.  Auction

 Performance (%) 
      Timeline 
Alpha Finance Lab 
Alpha Performance
0 of 100
Over the last 90 days Alpha Finance Lab 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 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 Alpha Finance Lab investors.

Alpha Price Channel

Auction 
Auction Performance
0 of 100
Over the last 90 days Auction 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 forward indicators remain quite persistent which may send shares a bit higher in June 2022. The latest mess may also be a sign of long-standing up-swing for Auction institutional investors.

Auction Price Channel

Alpha Finance and Auction Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Alpha Finance and Auction

The main advantage of trading using opposite Alpha Finance and Auction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpha Finance position performs unexpectedly, Auction 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 Auction will offset losses from the drop in Auction's long position.
The idea behind Alpha Finance Lab and Auction 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.

Other Complementary Tools

Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Go
Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
Go
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Go
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Go
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Go
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Go
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Go
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Go
Focused Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Go
Analyst Recommendations
Analyst recommendations and target price estimates broken down by several categories
Go
Probability Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
Go
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Go