Correlation Between Aston/crosswind Small and Active International
Can any of the company-specific risk be diversified away by investing in both Aston/crosswind Small and Active International 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 Aston/crosswind Small and Active International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astoncrosswind Small Cap and Active International Allocation, you can compare the effects of market volatilities on Aston/crosswind Small and Active International 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 Aston/crosswind Small with a short position of Active International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aston/crosswind Small and Active International.
Diversification Opportunities for Aston/crosswind Small and Active International
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aston/crosswind and Active is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Astoncrosswind Small Cap and Active International Allocatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Active International and Aston/crosswind Small 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 Astoncrosswind Small Cap are associated (or correlated) with Active International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Active International has no effect on the direction of Aston/crosswind Small i.e., Aston/crosswind Small and Active International go up and down completely randomly.
Pair Corralation between Aston/crosswind Small and Active International
Assuming the 90 days horizon Astoncrosswind Small Cap is expected to under-perform the Active International. In addition to that, Aston/crosswind Small is 1.27 times more volatile than Active International Allocation. It trades about -0.04 of its total potential returns per unit of risk. Active International Allocation is currently generating about -0.04 per unit of volatility. If you would invest 1,684 in Active International Allocation on November 7, 2024 and sell it today you would lose (34.00) from holding Active International Allocation or give up 2.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astoncrosswind Small Cap vs. Active International Allocatio
Performance |
| Timeline |
| Astoncrosswind Small Cap |
| Active International |
Aston/crosswind Small and Active International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aston/crosswind Small and Active International
The main advantage of trading using opposite Aston/crosswind Small and Active International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aston/crosswind Small position performs unexpectedly, Active International 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 Active International will offset losses from the drop in Active International's long position.| Aston/crosswind Small vs. Baron Real Estate | Aston/crosswind Small vs. Eventide Gilead Fund | Aston/crosswind Small vs. Buffalo Emerging Opportunities | Aston/crosswind Small vs. Large Cap Growth |
| Active International vs. Americafirst Large Cap | Active International vs. Siit Large Cap | Active International vs. Oakmark Fund Investor | Active International vs. Guidemark Large Cap |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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