Correlation Between Algorand and HT
Can any of the company-specific risk be diversified away by investing in both Algorand and HT 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 Algorand and HT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Algorand and HT, you can compare the effects of market volatilities on Algorand and HT 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 Algorand with a short position of HT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algorand and HT.
Diversification Opportunities for Algorand and HT
Excellent diversification
The 3 months correlation between Algorand and HT is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Algorand and HT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HT and Algorand 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 Algorand are associated (or correlated) with HT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HT has no effect on the direction of Algorand i.e., Algorand and HT go up and down completely randomly.
Pair Corralation between Algorand and HT
Assuming the 90 days trading horizon Algorand is expected to under-perform the HT. But the crypto coin apears to be less risky and, when comparing its historical volatility, Algorand is 1.05 times less risky than HT. The crypto coin trades about -0.21 of its potential returns per unit of risk. The HT is currently generating about -0.18 of returns per unit of risk over similar time horizon. If you would invest 84.00 in HT on January 20, 2024 and sell it today you would lose (22.00) from holding HT or give up 26.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Algorand vs. HT
Performance |
| Timeline |
| Algorand |
| HT |
Algorand and HT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algorand and HT
The main advantage of trading using opposite Algorand and HT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algorand position performs unexpectedly, HT 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 HT will offset losses from the drop in HT's long position.The idea behind Algorand and HT 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 the Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| CEOs Directory Screen CEOs from public companies around the world |