Correlation Between Cardano and Abacus FCF

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

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

Diversification Opportunities for Cardano and Abacus FCF

-0.01

Correlation Coefficient

Cardano  Abacus FCF

Good diversification

The 3 months correlation between Cardano and Abacus is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Cardano and Abacus FCF Leaders in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abacus FCF Leaders and Cardano 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 Cardano are associated (or correlated) with Abacus FCF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abacus FCF Leaders has no effect on the direction of Cardano i.e., Cardano and Abacus FCF go up and down completely randomly.

Pair Corralation between Cardano and Abacus FCF

Assuming the 90 days trading horizon Cardano is expected to under-perform the Abacus FCF. In addition to that, Cardano is 7.37 times more volatile than Abacus FCF Leaders. It trades about -0.01 of its total potential returns per unit of risk. Abacus FCF Leaders is currently generating about -0.06 per unit of volatility. If you would invest  6,761  in Abacus FCF Leaders on December 21, 2024 and sell it today you would lose (286.00) from holding Abacus FCF Leaders or give up 4.23% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.65%
Values	Daily Returns

Cardano  vs.  Abacus FCF Leaders

Cardano

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cardano has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Crypto's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for Cardano shareholders.

Abacus FCF Leaders

Risk-Adjusted Performance

Very Weak

Over the last 90 days Abacus FCF Leaders has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Abacus FCF is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Cardano and Abacus FCF

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

The idea behind Cardano and Abacus FCF Leaders 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 Stocks Directory module to find actively traded stocks across global markets.