Correlation Between Aragon and Auction

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

Diversification Opportunities for Aragon and Auction

0.93
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Aragon and Auction is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Aragon and Auction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auction and Aragon 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 Aragon 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 Aragon i.e., Aragon and Auction go up and down completely randomly.

Pair Corralation between Aragon and Auction

Assuming the 90 days trading horizon Aragon is expected to under-perform the Auction. But the crypto coin apears to be less risky and, when comparing its historical volatility, Aragon is 1.35 times less risky than Auction. The crypto coin trades about -0.17 of its potential returns per unit of risk. The Auction is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  1,411  in Auction on February 27, 2022 and sell it today you would lose (797.00)  from holding Auction or give up 56.48% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Aragon  vs.  Auction

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

Aragon 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

Aragon and Auction Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Aragon and Auction

The main advantage of trading using opposite Aragon and Auction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aragon 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 Aragon 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

Other Complementary Tools

Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Go
ETF Directory
Find actively traded Exchange Traded Funds (ETF) from around the world
Go
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Go
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Go
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Go
Fundamental Analysis
View fundamental data based on most recent published financial statements
Go
Bond Directory
Find actively traded corporate debentures issued by US companies
Go
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Go