Correlation Between Aston/crosswind Small and Sp Smallcap
Can any of the company-specific risk be diversified away by investing in both Aston/crosswind Small and Sp Smallcap 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 Sp Smallcap 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 Sp Smallcap 600, you can compare the effects of market volatilities on Aston/crosswind Small and Sp Smallcap 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 Sp Smallcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aston/crosswind Small and Sp Smallcap.
Diversification Opportunities for Aston/crosswind Small and Sp Smallcap
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aston/crosswind and RYSVX is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Astoncrosswind Small Cap and Sp Smallcap 600 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sp Smallcap 600 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 Sp Smallcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sp Smallcap 600 has no effect on the direction of Aston/crosswind Small i.e., Aston/crosswind Small and Sp Smallcap go up and down completely randomly.
Pair Corralation between Aston/crosswind Small and Sp Smallcap
Assuming the 90 days horizon Astoncrosswind Small Cap is expected to generate 0.89 times more return on investment than Sp Smallcap. However, Astoncrosswind Small Cap is 1.12 times less risky than Sp Smallcap. It trades about 0.19 of its potential returns per unit of risk. Sp Smallcap 600 is currently generating about 0.03 per unit of risk. If you would invest 1,744 in Astoncrosswind Small Cap on November 4, 2024 and sell it today you would earn a total of 59.00 from holding Astoncrosswind Small Cap or generate 3.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astoncrosswind Small Cap vs. Sp Smallcap 600
Performance |
| Timeline |
| Astoncrosswind Small Cap |
| Sp Smallcap 600 |
Aston/crosswind Small and Sp Smallcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aston/crosswind Small and Sp Smallcap
The main advantage of trading using opposite Aston/crosswind Small and Sp Smallcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aston/crosswind Small position performs unexpectedly, Sp Smallcap 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 Sp Smallcap will offset losses from the drop in Sp Smallcap'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 |
| Sp Smallcap vs. Prudential High Yield | Sp Smallcap vs. Jpmorgan High Yield | Sp Smallcap vs. Simt High Yield | Sp Smallcap vs. Artisan High Income |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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