Correlation Between Alkame Holdings and NaturalShrimp

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

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

Diversification Opportunities for Alkame Holdings and NaturalShrimp

0.1

Correlation Coefficient

Alkame Holdings  NaturalShrimp

Average diversification

The 3 months correlation between Alkame and NaturalShrimp is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Alkame Holdings and NaturalShrimp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NaturalShrimp and Alkame Holdings 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 Alkame Holdings are associated (or correlated) with NaturalShrimp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NaturalShrimp has no effect on the direction of Alkame Holdings i.e., Alkame Holdings and NaturalShrimp go up and down completely randomly.

Pair Corralation between Alkame Holdings and NaturalShrimp

Given the investment horizon of 90 days Alkame Holdings is expected to generate 2.44 times less return on investment than NaturalShrimp. But when comparing it to its historical volatility, Alkame Holdings is 1.28 times less risky than NaturalShrimp. It trades about 0.12 of its potential returns per unit of risk. NaturalShrimp is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  0.32  in NaturalShrimp on December 25, 2024 and sell it today you would lose (0.31) from holding NaturalShrimp or give up 96.87% of portfolio value over 90 days.

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

Alkame Holdings  vs.  NaturalShrimp

Alkame Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alkame Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile forward-looking signals, Alkame Holdings displayed solid returns over the last few months and may actually be approaching a breakup point.

NaturalShrimp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in NaturalShrimp are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent primary indicators, NaturalShrimp reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alkame Holdings and NaturalShrimp

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

The idea behind Alkame Holdings and NaturalShrimp 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.