Correlation Between Cardano and Roth CH

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

By analyzing existing cross correlation between Cardano and Roth CH Acquisition, you can compare the effects of market volatilities on Cardano and Roth CH 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 Roth CH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardano and Roth CH.

Diversification Opportunities for Cardano and Roth CH

-0.01

Correlation Coefficient

Cardano  Roth CH

Good diversification

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

Pair Corralation between Cardano and Roth CH

Assuming the 90 days trading horizon Cardano is expected to generate 2.22 times more return on investment than Roth CH. However, Cardano is 2.22 times more volatile than Roth CH Acquisition. It trades about 0.08 of its potential returns per unit of risk. Roth CH Acquisition is currently generating about -0.04 per unit of risk. If you would invest  37.00  in Cardano on October 10, 2024 and sell it today you would earn a total of  64.00  from holding Cardano or generate 172.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	62.13%
Values	Daily Returns

Cardano  vs.  Roth CH Acquisition

Cardano

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cardano are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Cardano exhibited solid returns over the last few months and may actually be approaching a breakup point.

Roth CH Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Roth CH Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Cardano and Roth CH

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

The idea behind Cardano and Roth CH Acquisition 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.