Correlation Between Algorand and Minehub Technologies

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

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

Diversification Opportunities for Algorand and Minehub Technologies

0.28

Correlation Coefficient

Algorand  Minehub Technologies

Modest diversification

The 3 months correlation between Algorand and Minehub is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Algorand and Minehub Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minehub Technologies and Algorand 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 Algorand are associated (or correlated) with Minehub Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minehub Technologies has no effect on the direction of Algorand i.e., Algorand and Minehub Technologies go up and down completely randomly.

Pair Corralation between Algorand and Minehub Technologies

Assuming the 90 days trading horizon Algorand is expected to generate 1.04 times more return on investment than Minehub Technologies. However, Algorand is 1.04 times more volatile than Minehub Technologies. It trades about 0.05 of its potential returns per unit of risk. Minehub Technologies is currently generating about 0.03 per unit of risk. If you would invest  27.00  in Algorand on October 24, 2024 and sell it today you would earn a total of  13.00  from holding Algorand or generate 48.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	60.2%
Values	Daily Returns

Algorand  vs.  Minehub Technologies

Algorand

Risk-Adjusted Performance

20 of 100

Solid

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

Minehub Technologies

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Minehub Technologies are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Minehub Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Algorand and Minehub Technologies

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

The idea behind Algorand and Minehub Technologies 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.