Correlation Between Where Food and Ault Alliance

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

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

Diversification Opportunities for Where Food and Ault Alliance

-0.64

Correlation Coefficient

Where Food  Ault Alliance

Excellent diversification

The 3 months correlation between Where and Ault is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Where Food Comes and Ault Alliance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ault Alliance and Where Food 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 Where Food Comes are associated (or correlated) with Ault Alliance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ault Alliance has no effect on the direction of Where Food i.e., Where Food and Ault Alliance go up and down completely randomly.

Pair Corralation between Where Food and Ault Alliance

Given the investment horizon of 90 days Where Food Comes is expected to generate 0.27 times more return on investment than Ault Alliance. However, Where Food Comes is 3.66 times less risky than Ault Alliance. It trades about 0.0 of its potential returns per unit of risk. Ault Alliance is currently generating about -0.18 per unit of risk. If you would invest  1,440  in Where Food Comes on September 13, 2024 and sell it today you would lose (210.00) from holding Where Food Comes or give up 14.58% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	86.87%
Values	Daily Returns

Where Food Comes  vs.  Ault Alliance

Where Food Comes

Risk-Adjusted Performance

8 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Where Food Comes are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Where Food may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Ault Alliance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ault Alliance has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Ault Alliance is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Where Food and Ault Alliance

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

The idea behind Where Food Comes and Ault Alliance 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.