Correlation Between Empire State and Ankr Network

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

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

Diversification Opportunities for Empire State and Ankr Network

0.35

Correlation Coefficient

Empire State  Ankr Network

Weak diversification

The 3 months correlation between Empire and Ankr is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and Ankr Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ankr Network and Empire State 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 Empire State Realty are associated (or correlated) with Ankr Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ankr Network has no effect on the direction of Empire State i.e., Empire State and Ankr Network go up and down completely randomly.

Pair Corralation between Empire State and Ankr Network

Given the investment horizon of 90 days Empire State is expected to generate 21.57 times less return on investment than Ankr Network. But when comparing it to its historical volatility, Empire State Realty is 3.7 times less risky than Ankr Network. It trades about 0.04 of its potential returns per unit of risk. Ankr Network is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  2.31  in Ankr Network on September 1, 2024 and sell it today you would earn a total of  2.16  from holding Ankr Network or generate 93.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.92%
Values	Daily Returns

Empire State Realty  vs.  Ankr Network

Empire State Realty

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Empire State Realty are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Empire State is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Ankr Network

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ankr Network are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Ankr Network exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Empire State and Ankr Network

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

The idea behind Empire State Realty and Ankr Network 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.