Correlation Between Abacus Mining and Zedcor Energy

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

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

Diversification Opportunities for Abacus Mining and Zedcor Energy

0.55

Correlation Coefficient

Abacus Mining  Zedcor Energy

Very weak diversification

The 3 months correlation between Abacus and Zedcor is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Abacus Mining and and Zedcor Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zedcor Energy and Abacus Mining 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 Abacus Mining and are associated (or correlated) with Zedcor Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zedcor Energy has no effect on the direction of Abacus Mining i.e., Abacus Mining and Zedcor Energy go up and down completely randomly.

Pair Corralation between Abacus Mining and Zedcor Energy

Assuming the 90 days horizon Abacus Mining and is expected to generate 2.31 times more return on investment than Zedcor Energy. However, Abacus Mining is 2.31 times more volatile than Zedcor Energy. It trades about 0.11 of its potential returns per unit of risk. Zedcor Energy is currently generating about 0.26 per unit of risk. If you would invest  3.00  in Abacus Mining and on January 31, 2024 and sell it today you would earn a total of  1.00  from holding Abacus Mining and or generate 33.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	97.56%
Values	Daily Returns

Abacus Mining and  vs.  Zedcor Energy

Abacus Mining

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Abacus Mining and are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Abacus Mining showed solid returns over the last few months and may actually be approaching a breakup point.

Zedcor Energy

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Zedcor Energy are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Zedcor Energy showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Abacus Mining and Zedcor Energy

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

The idea behind Abacus Mining and and Zedcor Energy 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.