Correlation Between Ault Alliance and Paragon Technologies

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

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

Diversification Opportunities for Ault Alliance and Paragon Technologies

-0.82

Correlation Coefficient

Ault Alliance  Paragon Technologies

Pay attention - limited upside

The 3 months correlation between Ault and Paragon is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Ault Alliance and Paragon Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paragon Technologies and Ault Alliance 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 Ault Alliance are associated (or correlated) with Paragon Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paragon Technologies has no effect on the direction of Ault Alliance i.e., Ault Alliance and Paragon Technologies go up and down completely randomly.

Pair Corralation between Ault Alliance and Paragon Technologies

If you would invest  650.00  in Paragon Technologies on September 14, 2024 and sell it today you would earn a total of  160.00  from holding Paragon Technologies or generate 24.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	1.59%
Values	Daily Returns

Ault Alliance  vs.  Paragon Technologies

Ault Alliance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ault Alliance has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Ault Alliance is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Paragon Technologies

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Paragon Technologies are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Paragon Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ault Alliance and Paragon Technologies

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

The idea behind Ault Alliance and Paragon 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.