Correlation Between Arweave and Horizen

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

Diversification Opportunities for Arweave and Horizen

0.8
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Arweave and Horizen is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Arweave and Horizen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizen and Arweave 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 Arweave are associated (or correlated) with Horizen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizen has no effect on the direction of Arweave i.e., Arweave and Horizen go up and down completely randomly.

Pair Corralation between Arweave and Horizen

Assuming the 90 days horizon Arweave is expected to generate 1.11 times more return on investment than Horizen. However, Arweave is 1.11 times more volatile than Horizen. It trades about 0.02 of its potential returns per unit of risk. Horizen is currently generating about -0.03 per unit of risk. If you would invest  933.00  in Arweave on July 5, 2022 and sell it today you would lose (6.00)  from holding Arweave or give up 0.64% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Arweave  vs.  Horizen

 Performance (%) 
       Timeline  
Arweave 
Arweave Performance
0 of 100
Over the last 90 days Arweave has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Crypto's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for Arweave investors.

Arweave Price Channel

Horizen 
Horizen Performance
0 of 100
Over the last 90 days Horizen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Horizen is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Horizen Price Channel

Arweave and Horizen Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Arweave and Horizen

The main advantage of trading using opposite Arweave and Horizen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arweave position performs unexpectedly, Horizen 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 Horizen will offset losses from the drop in Horizen's long position.
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The idea behind Arweave and Horizen 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.
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

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