Correlation Between ABBC and 1inch

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Can any of the company-specific risk be diversified away by investing in both ABBC and 1inch 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 ABBC and 1inch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABBC and 1inch, you can compare the effects of market volatilities on ABBC and 1inch 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 ABBC with a short position of 1inch. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABBC and 1inch.

Diversification Opportunities for ABBC and 1inch

-0.32
  Correlation Coefficient

Very good diversification

The 3 months correlation between ABBC and 1inch is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding ABBC and 1inch in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1inch and ABBC 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 ABBC are associated (or correlated) with 1inch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1inch has no effect on the direction of ABBC i.e., ABBC and 1inch go up and down completely randomly.

Pair Corralation between ABBC and 1inch

Assuming the 90 days trading horizon ABBC is expected to under-perform the 1inch. But the crypto coin apears to be less risky and, when comparing its historical volatility, ABBC is 2.19 times less risky than 1inch. The crypto coin trades about -0.11 of its potential returns per unit of risk. The 1inch is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  51.00  in 1inch on December 30, 2023 and sell it today you would earn a total of  9.00  from holding 1inch or generate 17.65% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

ABBC  vs.  1inch

 Performance 
       Timeline  
ABBC 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days ABBC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's basic indicators remain rather sound which may send shares a bit higher in April 2024. The latest tumult may also be a sign of longer-term up-swing for ABBC shareholders.
1inch 

Risk-Adjusted Performance

9 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in 1inch are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical indicators, 1inch exhibited solid returns over the last few months and may actually be approaching a breakup point.

ABBC and 1inch Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ABBC and 1inch

The main advantage of trading using opposite ABBC and 1inch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABBC position performs unexpectedly, 1inch 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 1inch will offset losses from the drop in 1inch's long position.
The idea behind ABBC and 1inch 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

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