Correlation Between Adams Diversified and Kellner Merger
Can any of the company-specific risk be diversified away by investing in both Adams Diversified and Kellner Merger 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 Adams Diversified and Kellner Merger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adams Diversified Equity and Kellner Merger Fund, you can compare the effects of market volatilities on Adams Diversified and Kellner Merger 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 Adams Diversified with a short position of Kellner Merger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adams Diversified and Kellner Merger.
Diversification Opportunities for Adams Diversified and Kellner Merger
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Adams and Kellner is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Adams Diversified Equity and Kellner Merger Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kellner Merger and Adams Diversified 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 Adams Diversified Equity are associated (or correlated) with Kellner Merger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kellner Merger has no effect on the direction of Adams Diversified i.e., Adams Diversified and Kellner Merger go up and down completely randomly.
Pair Corralation between Adams Diversified and Kellner Merger
Considering the 90-day investment horizon Adams Diversified Equity is expected to generate 4.28 times more return on investment than Kellner Merger. However, Adams Diversified is 4.28 times more volatile than Kellner Merger Fund. It trades about 0.26 of its potential returns per unit of risk. Kellner Merger Fund is currently generating about 0.14 per unit of risk. If you would invest 1,974 in Adams Diversified Equity on September 4, 2024 and sell it today you would earn a total of 94.00 from holding Adams Diversified Equity or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Adams Diversified Equity vs. Kellner Merger Fund
Performance |
| Timeline |
| Adams Diversified Equity |
| Kellner Merger |
Adams Diversified and Kellner Merger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adams Diversified and Kellner Merger
The main advantage of trading using opposite Adams Diversified and Kellner Merger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adams Diversified position performs unexpectedly, Kellner Merger 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 Kellner Merger will offset losses from the drop in Kellner Merger's long position.| Adams Diversified vs. Tri Continental Closed | Adams Diversified vs. SRH Total Return | Adams Diversified vs. Putnam Municipal Opportunities | Adams Diversified vs. Tortoise Energy Independence |
| Kellner Merger vs. Kellner Merger Fund | Kellner Merger vs. Artisan High Income | Kellner Merger vs. Tiaa Cref Large Cap Growth | Kellner Merger vs. Vanguard 500 Index |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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