Correlation Between Auction and API3

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Auction and API3 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 Auction and API3 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auction and API3, you can compare the effects of market volatilities on Auction and API3 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 Auction with a short position of API3. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auction and API3.

Diversification Opportunities for Auction and API3

0.45
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Auction and API3 is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Auction and API3 in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on API3 and Auction 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 Auction are associated (or correlated) with API3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of API3 has no effect on the direction of Auction i.e., Auction and API3 go up and down completely randomly.

Pair Corralation between Auction and API3

Assuming the 90 days trading horizon Auction is expected to generate 0.54 times more return on investment than API3. However, Auction is 1.84 times less risky than API3. It trades about -0.46 of its potential returns per unit of risk. API3 is currently generating about -0.3 per unit of risk. If you would invest  1,373  in Auction on February 15, 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 
StrengthWeak
Accuracy80.95%
ValuesDaily Returns

Auction  vs.  API3

 Performance (%) 
      Timeline 
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

API3 
API3 Performance
0 of 100
Over the last 90 days API3 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 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 API3 investors.

API3 Price Channel

Auction and API3 Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Auction and API3

The main advantage of trading using opposite Auction and API3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auction position performs unexpectedly, API3 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 API3 will offset losses from the drop in API3's long position.
The idea behind Auction and API3 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 ETF Directory module to find actively traded Exchange Traded Funds (ETF) from around the world.

Other Complementary Tools

Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Go
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Go
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Go
Commodity Channel Index
Use Commodity Channel Index to analyze current equity momentum
Go
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Go
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Go
Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios
Go
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Go