Correlation Between Mantle and ARDR

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

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

Diversification Opportunities for Mantle and ARDR

0.85

Correlation Coefficient

Mantle  ARDR

Very poor diversification

The 3 months correlation between Mantle and ARDR is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Mantle and ARDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARDR and Mantle 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 Mantle are associated (or correlated) with ARDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARDR has no effect on the direction of Mantle i.e., Mantle and ARDR go up and down completely randomly.

Pair Corralation between Mantle and ARDR

Assuming the 90 days trading horizon Mantle is expected to generate 1.7 times less return on investment than ARDR. But when comparing it to its historical volatility, Mantle is 1.91 times less risky than ARDR. It trades about 0.17 of its potential returns per unit of risk. ARDR is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  6.21  in ARDR on September 2, 2024 and sell it today you would earn a total of  5.79  from holding ARDR or generate 93.24% return on investment over 90 days.

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

Mantle  vs.  ARDR

Mantle

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mantle are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Mantle sustained solid returns over the last few months and may actually be approaching a breakup point.

ARDR

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ARDR are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, ARDR exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mantle and ARDR

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

The idea behind Mantle and ARDR 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.