Correlation Between Mast Global and ARK Genomic

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

By analyzing existing cross correlation between Mast Global Battery and ARK Genomic Revolution, you can compare the effects of market volatilities on Mast Global and ARK Genomic 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 Mast Global with a short position of ARK Genomic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mast Global and ARK Genomic.

Diversification Opportunities for Mast Global and ARK Genomic

0.2

Correlation Coefficient

Mast Global  ARK Genomic

Modest diversification

The 3 months correlation between Mast and ARK is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Mast Global Battery and ARK Genomic Revolution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARK Genomic Revolution and Mast Global 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 Mast Global Battery are associated (or correlated) with ARK Genomic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARK Genomic Revolution has no effect on the direction of Mast Global i.e., Mast Global and ARK Genomic go up and down completely randomly.

Pair Corralation between Mast Global and ARK Genomic

Allowing for the 90-day total investment horizon Mast Global Battery is expected to under-perform the ARK Genomic. In addition to that, Mast Global is 2.43 times more volatile than ARK Genomic Revolution. It trades about -0.06 of its total potential returns per unit of risk. ARK Genomic Revolution is currently generating about -0.01 per unit of volatility. If you would invest  3,649  in ARK Genomic Revolution on October 24, 2024 and sell it today you would lose (927.00) from holding ARK Genomic Revolution or give up 25.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	54.86%
Values	Daily Returns

Mast Global Battery  vs.  ARK Genomic Revolution

Mast Global Battery

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mast Global Battery has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Mast Global is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

ARK Genomic Revolution

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ARK Genomic Revolution are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak forward-looking signals, ARK Genomic reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mast Global and ARK Genomic

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

The idea behind Mast Global Battery and ARK Genomic Revolution 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.