Correlation Between BakeryToken and My Neighbor

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

Diversification Opportunities for BakeryToken and My Neighbor

0.69
  Correlation Coefficient

Poor diversification

The 3 months correlation between BakeryToken and ALICE is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding BakeryToken and My Neighbor Alice in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on My Neighbor Alice and BakeryToken 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 BakeryToken are associated (or correlated) with My Neighbor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of My Neighbor Alice has no effect on the direction of BakeryToken i.e., BakeryToken and My Neighbor go up and down completely randomly.

Pair Corralation between BakeryToken and My Neighbor

Assuming the 90 days trading horizon BakeryToken is expected to under-perform the My Neighbor. In addition to that, BakeryToken is 1.22 times more volatile than My Neighbor Alice. It trades about -0.08 of its total potential returns per unit of risk. My Neighbor Alice is currently generating about -0.06 per unit of volatility. If you would invest  1,191  in My Neighbor Alice on February 19, 2022 and sell it today you would lose (885.00)  from holding My Neighbor Alice or give up 74.31% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

BakeryToken  vs.  My Neighbor Alice

 Performance (%) 
      Timeline 
BakeryToken 
BakeryToken Performance
0 of 100
Over the last 90 days BakeryToken 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-looking signals 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 BakeryToken investors.

BakeryToken Price Channel

My Neighbor Alice 
ALICE Performance
0 of 100
Over the last 90 days My Neighbor Alice 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 My Neighbor Alice investors.

ALICE Price Channel

BakeryToken and My Neighbor Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with BakeryToken and My Neighbor

The main advantage of trading using opposite BakeryToken and My Neighbor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BakeryToken position performs unexpectedly, My Neighbor 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 My Neighbor will offset losses from the drop in My Neighbor's long position.
The idea behind BakeryToken and My Neighbor Alice 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.

Other Complementary Tools

Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Go
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Go
Fund Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Go
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Go
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Go
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Go
Piotroski F Score
Get Piotroski F Score based on binary analysis strategy of nine different fundamentals
Go
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Go