Correlation Between ABL and Dusk Network

Can any of the company-specific risk be diversified away by investing in both ABL and Dusk Network 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 ABL and Dusk Network into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ABL and Dusk Network, you can compare the effects of market volatilities on ABL and Dusk Network 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 ABL with a short position of Dusk Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABL and Dusk Network.

Diversification Opportunities for ABL and Dusk Network

-0.77

Correlation Coefficient

ABL  Dusk Network

Pay attention - limited upside

The 3 months correlation between ABL and Dusk is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding ABL and Dusk Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dusk Network and ABL 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 ABL are associated (or correlated) with Dusk Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dusk Network has no effect on the direction of ABL i.e., ABL and Dusk Network go up and down completely randomly.

Pair Corralation between ABL and Dusk Network

Assuming the 90 days trading horizon ABL is expected to under-perform the Dusk Network. But the crypto coin apears to be less risky and, when comparing its historical volatility, ABL is 2.1 times less risky than Dusk Network. The crypto coin trades about -0.02 of its potential returns per unit of risk. The Dusk Network is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  23.00  in Dusk Network on January 20, 2024 and sell it today you would earn a total of  15.00  from holding Dusk Network or generate 65.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	71.4%
Values	Daily Returns

ABL  vs.  Dusk Network

ABL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ABL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, ABL is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Dusk Network

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dusk Network are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Dusk Network exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ABL and Dusk Network

The main advantage of trading using opposite ABL and Dusk Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABL position performs unexpectedly, Dusk Network 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 Dusk Network will offset losses from the drop in Dusk Network's long position.

The idea behind ABL and Dusk Network 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.

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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.