Correlation Between Audius and Chiliz

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

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

Diversification Opportunities for Audius and Chiliz

0.95

Correlation Coefficient

Audius  Chiliz

Almost no diversification

The 3 months correlation between Audius and Chiliz is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Audius and Chiliz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chiliz and Audius 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 Audius are associated (or correlated) with Chiliz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chiliz has no effect on the direction of Audius i.e., Audius and Chiliz go up and down completely randomly.

Pair Corralation between Audius and Chiliz

Assuming the 90 days trading horizon Audius is expected to under-perform the Chiliz. But the crypto coin apears to be less risky and, when comparing its historical volatility, Audius is 1.16 times less risky than Chiliz. The crypto coin trades about -0.18 of its potential returns per unit of risk. The Chiliz is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  12.00  in Chiliz on January 16, 2024 and sell it today you would lose (2.00) from holding Chiliz or give up 16.67% of portfolio value over 90 days.

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

Audius  vs.  Chiliz

Audius

Risk-Adjusted Performance

0 of 100

Very Weak

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

Chiliz

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Chiliz are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Chiliz exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Audius and Chiliz

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

The idea behind Audius and Chiliz 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.