Correlation Between AKRO and Storj

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

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

Diversification Opportunities for AKRO and Storj

0.5

Correlation Coefficient

AKRO  Storj

Very weak diversification

The 3 months correlation between AKRO and Storj is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding AKRO and Storj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Storj and AKRO 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 AKRO are associated (or correlated) with Storj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Storj has no effect on the direction of AKRO i.e., AKRO and Storj go up and down completely randomly.

Pair Corralation between AKRO and Storj

Assuming the 90 days trading horizon AKRO is expected to generate 1.06 times more return on investment than Storj. However, AKRO is 1.06 times more volatile than Storj. It trades about 0.03 of its potential returns per unit of risk. Storj is currently generating about 0.02 per unit of risk. If you would invest  0.80  in AKRO on January 19, 2024 and sell it today you would lose (0.19) from holding AKRO or give up 23.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

AKRO  vs.  Storj

AKRO

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AKRO are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, AKRO exhibited solid returns over the last few months and may actually be approaching a breakup point.

Storj

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with AKRO and Storj

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

The idea behind AKRO and Storj 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 Transaction History module to view history of all your transactions and understand their impact on performance.