Correlation Between Ault Alliance and AppHarvest

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

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

Diversification Opportunities for Ault Alliance and AppHarvest

0.0

Correlation Coefficient

Ault Alliance  AppHarvest

Pay attention - limited upside

The 3 months correlation between Ault and AppHarvest is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ault Alliance and AppHarvest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AppHarvest and Ault Alliance 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 Ault Alliance are associated (or correlated) with AppHarvest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AppHarvest has no effect on the direction of Ault Alliance i.e., Ault Alliance and AppHarvest go up and down completely randomly.

Pair Corralation between Ault Alliance and AppHarvest

If you would invest  39.00  in Ault Alliance on March 7, 2024 and sell it today you would lose (6.00) from holding Ault Alliance or give up 15.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Ault Alliance  vs.  AppHarvest

Ault Alliance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ault Alliance has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Ault Alliance is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

AppHarvest

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AppHarvest has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, AppHarvest is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Ault Alliance and AppHarvest

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

The idea behind Ault Alliance and AppHarvest 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..