Correlation Between Midnight and ARDR
Can any of the company-specific risk be diversified away by investing in both Midnight 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 Midnight and ARDR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Midnight and ARDR, you can compare the effects of market volatilities on Midnight 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 Midnight with a short position of ARDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Midnight and ARDR.
Diversification Opportunities for Midnight and ARDR
Very good diversification
The 3 months correlation between Midnight and ARDR is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Midnight and ARDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARDR and Midnight 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 Midnight 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 Midnight i.e., Midnight and ARDR go up and down completely randomly.
Pair Corralation between Midnight and ARDR
Assuming the 90 days trading horizon Midnight is expected to generate 47.89 times more return on investment than ARDR. However, Midnight is 47.89 times more volatile than ARDR. It trades about 0.17 of its potential returns per unit of risk. ARDR is currently generating about 0.02 per unit of risk. If you would invest 0.00 in Midnight on October 10, 2025 and sell it today you would earn a total of 7.77 from holding Midnight or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Midnight vs. ARDR
Performance |
| Timeline |
| Midnight |
| ARDR |
Midnight and ARDR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Midnight and ARDR
The main advantage of trading using opposite Midnight and ARDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Midnight 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 Midnight 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.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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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