Correlation Between EOS and ARK

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

Diversification Opportunities for EOS and ARK

0.97
  Correlation Coefficient

Almost no diversification

The 3 months correlation between EOS and ARK is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding EOS and ARK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARK and EOS 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 EOS are associated (or correlated) with ARK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARK has no effect on the direction of EOS i.e., EOS and ARK go up and down completely randomly.

Pair Corralation between EOS and ARK

Assuming the 90 days trading horizon EOS is expected to under-perform the ARK. But the crypto coin apears to be less risky and, when comparing its historical volatility, EOS is 1.63 times less risky than ARK. The crypto coin trades about -0.11 of its potential returns per unit of risk. The ARK is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  50.00  in ARK on March 27, 2022 and sell it today you would lose (4.00)  from holding ARK or give up 8.0% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

EOS  vs.  ARK

 Performance (%) 
      Timeline 
EOS 
EOS Performance
0 of 100
Over the last 90 days EOS 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 July 2022. The current disturbance may also be a sign of long term up-swing for EOS investors.

EOS Price Channel

ARK 
ARK Performance
0 of 100
Over the last 90 days ARK 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 July 2022. The current disturbance may also be a sign of long term up-swing for ARK investors.

ARK Price Channel

EOS and ARK Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with EOS and ARK

The main advantage of trading using opposite EOS and ARK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EOS position performs unexpectedly, ARK 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 ARK will offset losses from the drop in ARK's long position.
The idea behind EOS and ARK 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

Other Complementary Tools

Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Go
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Go
Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Go
Transaction History
View history of all your transactions and understand their impact on performance
Go
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Go
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Go