Correlation Between AERGO and PancakeSwap

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

Diversification Opportunities for AERGO and PancakeSwap

0.85
  Correlation Coefficient

Very poor diversification

The 3 months correlation between AERGO and PancakeSwap is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding AERGO and PancakeSwap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PancakeSwap and AERGO 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 AERGO are associated (or correlated) with PancakeSwap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PancakeSwap has no effect on the direction of AERGO i.e., AERGO and PancakeSwap go up and down completely randomly.

Pair Corralation between AERGO and PancakeSwap

Assuming the 90 days trading horizon AERGO is expected to generate 1.92 times less return on investment than PancakeSwap. But when comparing it to its historical volatility, AERGO is 1.12 times less risky than PancakeSwap. It trades about 0.15 of its potential returns per unit of risk. PancakeSwap is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  314.00  in PancakeSwap on December 29, 2023 and sell it today you would earn a total of  148.00  from holding PancakeSwap or generate 47.13% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

AERGO  vs.  PancakeSwap

 Performance 
       Timeline  
AERGO 

Risk-Adjusted Performance

4 of 100

 
Low
 
High
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in AERGO are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, AERGO exhibited solid returns over the last few months and may actually be approaching a breakup point.
PancakeSwap 

Risk-Adjusted Performance

7 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in PancakeSwap are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, PancakeSwap exhibited solid returns over the last few months and may actually be approaching a breakup point.

AERGO and PancakeSwap Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with AERGO and PancakeSwap

The main advantage of trading using opposite AERGO and PancakeSwap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AERGO position performs unexpectedly, PancakeSwap 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 PancakeSwap will offset losses from the drop in PancakeSwap's long position.
The idea behind AERGO and PancakeSwap 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.

Other Complementary Tools

Sectors
List of equity sectors categorizing publicly traded companies based on their primary business activities
Piotroski F Score
Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
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
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Transaction History
View history of all your transactions and understand their impact on performance