Correlation Between Absolute Core and AdvisorShares
Can any of the company-specific risk be diversified away by investing in both Absolute Core and AdvisorShares 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 AdvisorShares 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 AdvisorShares, you can compare the effects of market volatilities on Absolute Core and AdvisorShares 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 AdvisorShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Absolute Core and AdvisorShares.
Diversification Opportunities for Absolute Core and AdvisorShares
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Absolute and AdvisorShares is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Absolute Core Strategy and AdvisorShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AdvisorShares 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 AdvisorShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AdvisorShares has no effect on the direction of Absolute Core i.e., Absolute Core and AdvisorShares go up and down completely randomly.
Pair Corralation between Absolute Core and AdvisorShares
If you would invest 2,798 in Absolute Core Strategy on September 12, 2024 and sell it today you would earn a total of 457.00 from holding Absolute Core Strategy or generate 16.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.28% |
| Values | Daily Returns |
Absolute Core Strategy vs. AdvisorShares
Performance |
| Timeline |
| Absolute Core Strategy |
| AdvisorShares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Absolute Core and AdvisorShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Absolute Core and AdvisorShares
The main advantage of trading using opposite Absolute Core and AdvisorShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Absolute Core position performs unexpectedly, AdvisorShares 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 AdvisorShares will offset losses from the drop in AdvisorShares' 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 |
| AdvisorShares vs. iShares Factors Growth | AdvisorShares vs. Absolute Core Strategy | AdvisorShares vs. iShares ESG Advanced | AdvisorShares 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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