Correlation Between AKRO and OPEN

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

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

Diversification Opportunities for AKRO and OPEN

0.11

Correlation Coefficient

AKRO  OPEN

Average diversification

The 3 months correlation between AKRO and OPEN is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding AKRO and OPEN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPEN and AKRO 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 AKRO are associated (or correlated) with OPEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPEN has no effect on the direction of AKRO i.e., AKRO and OPEN go up and down completely randomly.

Pair Corralation between AKRO and OPEN

Assuming the 90 days trading horizon AKRO is expected to under-perform the OPEN. But the crypto coin apears to be less risky and, when comparing its historical volatility, AKRO is 22.32 times less risky than OPEN. The crypto coin trades about -0.01 of its potential returns per unit of risk. The OPEN is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  0.04  in OPEN on January 30, 2024 and sell it today you would earn a total of  3.16  from holding OPEN or generate 7411.74% return on investment over 90 days.

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

AKRO  vs.  OPEN

AKRO

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AKRO are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, AKRO exhibited solid returns over the last few months and may actually be approaching a breakup point.

OPEN

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in OPEN are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, OPEN exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AKRO and OPEN

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

The idea behind AKRO and OPEN 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.