Correlation Between Absolute Core and Brendan Wood
Can any of the company-specific risk be diversified away by investing in both Absolute Core and Brendan Wood 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 Absolute Core and Brendan Wood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Absolute Core Strategy and Brendan Wood TopGun, you can compare the effects of market volatilities on Absolute Core and Brendan Wood 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 Absolute Core with a short position of Brendan Wood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Absolute Core and Brendan Wood.
Diversification Opportunities for Absolute Core and Brendan Wood
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Absolute and Brendan is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Absolute Core Strategy and Brendan Wood TopGun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brendan Wood TopGun and Absolute Core 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 Absolute Core Strategy are associated (or correlated) with Brendan Wood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brendan Wood TopGun has no effect on the direction of Absolute Core i.e., Absolute Core and Brendan Wood go up and down completely randomly.
Pair Corralation between Absolute Core and Brendan Wood
Given the investment horizon of 90 days Absolute Core is expected to generate 1.65 times less return on investment than Brendan Wood. But when comparing it to its historical volatility, Absolute Core Strategy is 1.42 times less risky than Brendan Wood. It trades about 0.12 of its potential returns per unit of risk. Brendan Wood TopGun is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,603 in Brendan Wood TopGun on September 14, 2024 and sell it today you would earn a total of 899.00 from holding Brendan Wood TopGun or generate 34.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Absolute Core Strategy vs. Brendan Wood TopGun
Performance |
| Timeline |
| Absolute Core Strategy |
| Brendan Wood TopGun |
Absolute Core and Brendan Wood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Absolute Core and Brendan Wood
The main advantage of trading using opposite Absolute Core and Brendan Wood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Absolute Core position performs unexpectedly, Brendan Wood 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 Brendan Wood will offset losses from the drop in Brendan Wood's long position.| Absolute Core vs. Anfield Equity Sector | Absolute Core vs. AdvisorShares Dorsey Wright | Absolute Core vs. First Trust Active | Absolute Core vs. Aptus Collared Income |
| Brendan Wood vs. iShares Factors Growth | Brendan Wood vs. Absolute Core Strategy | Brendan Wood vs. iShares ESG Advanced | Brendan Wood vs. PIMCO RAFI Dynamic |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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