Correlation Between GMX and Ankr Network

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

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

Diversification Opportunities for GMX and Ankr Network

0.83

Correlation Coefficient

GMX  Ankr Network

Very poor diversification

The 3 months correlation between GMX and Ankr is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding GMX and Ankr Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ankr Network and GMX 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 GMX 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 GMX i.e., GMX and Ankr Network go up and down completely randomly.

Pair Corralation between GMX and Ankr Network

Assuming the 90 days trading horizon GMX is expected to generate 2.31 times less return on investment than Ankr Network. In addition to that, GMX is 1.03 times more volatile than Ankr Network. It trades about 0.1 of its total potential returns per unit of risk. Ankr Network is currently generating about 0.23 per unit of volatility. 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	Strong
Accuracy	100.0%
Values	Daily Returns

GMX  vs.  Ankr Network

GMX

Risk-Adjusted Performance

7 of 100

Modest

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

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 GMX and Ankr Network

The main advantage of trading using opposite GMX and Ankr Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMX 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 GMX 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.

Check out your portfolio center.

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 Valuation module to check real value of public entities based on technical and fundamental data.