Correlation Between Ankr Network and Chroma

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

Diversification Opportunities for Ankr Network and Chroma

0.67
  Correlation Coefficient

Poor diversification

The 3 months correlation between Ankr and Chroma is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Ankr Network and Chroma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chroma and Ankr Network 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 Ankr Network are associated (or correlated) with Chroma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chroma has no effect on the direction of Ankr Network i.e., Ankr Network and Chroma go up and down completely randomly.

Pair Corralation between Ankr Network and Chroma

Assuming the 90 days trading horizon Ankr Network is expected to generate 1.31 times more return on investment than Chroma. However, Ankr Network is 1.31 times more volatile than Chroma. It trades about 0.23 of its potential returns per unit of risk. Chroma is currently generating about 0.15 per unit of risk. If you would invest  3.71  in Ankr Network on December 30, 2023 and sell it today you would earn a total of  1.85  from holding Ankr Network or generate 49.87% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Ankr Network  vs.  Chroma

 Performance 
       Timeline  
Ankr Network 

Risk-Adjusted Performance

15 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Ankr Network are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Ankr Network exhibited solid returns over the last few months and may actually be approaching a breakup point.
Chroma 

Risk-Adjusted Performance

12 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Chroma are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Chroma exhibited solid returns over the last few months and may actually be approaching a breakup point.

Ankr Network and Chroma Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ankr Network and Chroma

The main advantage of trading using opposite Ankr Network and Chroma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ankr Network position performs unexpectedly, Chroma 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 Chroma will offset losses from the drop in Chroma's long position.
The idea behind Ankr Network and Chroma 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.

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