Correlation Between ARK Autonomous and BLACK

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

By analyzing existing cross correlation between ARK Autonomous Technology and BLACK HILLS P, you can compare the effects of market volatilities on ARK Autonomous and BLACK 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 ARK Autonomous with a short position of BLACK. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARK Autonomous and BLACK.

Diversification Opportunities for ARK Autonomous and BLACK

-0.24

Correlation Coefficient

ARK Autonomous  BLACK

Very good diversification

The 3 months correlation between ARK and BLACK is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding ARK Autonomous Technology and BLACK HILLS P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BLACK HILLS P and ARK Autonomous 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 ARK Autonomous Technology are associated (or correlated) with BLACK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BLACK HILLS P has no effect on the direction of ARK Autonomous i.e., ARK Autonomous and BLACK go up and down completely randomly.

Pair Corralation between ARK Autonomous and BLACK

Given the investment horizon of 90 days ARK Autonomous Technology is expected to under-perform the BLACK. In addition to that, ARK Autonomous is 7.76 times more volatile than BLACK HILLS P. It trades about -0.1 of its total potential returns per unit of risk. BLACK HILLS P is currently generating about 0.04 per unit of volatility. If you would invest  9,665  in BLACK HILLS P on December 13, 2024 and sell it today you would earn a total of  54.00  from holding BLACK HILLS P or generate 0.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	84.75%
Values	Daily Returns

ARK Autonomous Technology  vs.  BLACK HILLS P

ARK Autonomous Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days ARK Autonomous Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Etf's forward-looking signals remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the ETF retail investors.

BLACK HILLS P

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BLACK HILLS P are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, BLACK is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ARK Autonomous and BLACK

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

The idea behind ARK Autonomous Technology and BLACK HILLS P 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.