Correlation Between Ardor and Coin98

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Can any of the company-specific risk be diversified away by investing in both Ardor and Coin98 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 Ardor and Coin98 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ardor and Coin98, you can compare the effects of market volatilities on Ardor and Coin98 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 Ardor with a short position of Coin98. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ardor and Coin98.

Diversification Opportunities for Ardor and Coin98

0.94
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Ardor and Coin98 is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Ardor and Coin98 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coin98 and Ardor 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 Ardor are associated (or correlated) with Coin98. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coin98 has no effect on the direction of Ardor i.e., Ardor and Coin98 go up and down completely randomly.

Pair Corralation between Ardor and Coin98

Assuming the 90 days trading horizon Ardor is expected to generate 0.77 times more return on investment than Coin98. However, Ardor is 1.29 times less risky than Coin98. It trades about -0.1 of its potential returns per unit of risk. Coin98 is currently generating about -0.12 per unit of risk. If you would invest  21.00  in Ardor on February 27, 2022 and sell it today you would lose (10.00)  from holding Ardor or give up 47.62% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy98.46%
ValuesDaily Returns

Ardor  vs.  Coin98

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

Ardor Price Channel

Coin98 
Coin98 Performance
0 of 100
Over the last 90 days Coin98 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 Coin98 investors.

Coin98 Price Channel

Ardor and Coin98 Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Ardor and Coin98

The main advantage of trading using opposite Ardor and Coin98 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ardor position performs unexpectedly, Coin98 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 Coin98 will offset losses from the drop in Coin98's long position.
The idea behind Ardor and Coin98 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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