Correlation Between Applied Finance and Strategic Enhanced
Can any of the company-specific risk be diversified away by investing in both Applied Finance and Strategic Enhanced 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 Applied Finance and Strategic Enhanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Finance Explorer and Strategic Enhanced Yield, you can compare the effects of market volatilities on Applied Finance and Strategic Enhanced 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 Applied Finance with a short position of Strategic Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Finance and Strategic Enhanced.
Diversification Opportunities for Applied Finance and Strategic Enhanced
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Applied and Strategic is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Applied Finance Explorer and Strategic Enhanced Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Enhanced Yield and Applied Finance 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 Applied Finance Explorer are associated (or correlated) with Strategic Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Enhanced Yield has no effect on the direction of Applied Finance i.e., Applied Finance and Strategic Enhanced go up and down completely randomly.
Pair Corralation between Applied Finance and Strategic Enhanced
Assuming the 90 days horizon Applied Finance Explorer is expected to generate 5.84 times more return on investment than Strategic Enhanced. However, Applied Finance is 5.84 times more volatile than Strategic Enhanced Yield. It trades about 0.07 of its potential returns per unit of risk. Strategic Enhanced Yield is currently generating about 0.1 per unit of risk. If you would invest 1,876 in Applied Finance Explorer on September 2, 2024 and sell it today you would earn a total of 552.00 from holding Applied Finance Explorer or generate 29.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Applied Finance Explorer vs. Strategic Enhanced Yield
Performance |
| Timeline |
| Applied Finance Explorer |
| Strategic Enhanced Yield |
Applied Finance and Strategic Enhanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Finance and Strategic Enhanced
The main advantage of trading using opposite Applied Finance and Strategic Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Finance position performs unexpectedly, Strategic Enhanced 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 Strategic Enhanced will offset losses from the drop in Strategic Enhanced's long position.| Applied Finance vs. Thrivent Small Cap | Applied Finance vs. Applied Finance Select | Applied Finance vs. Parnassus Endeavor Fund | Applied Finance vs. Queens Road Small |
| Strategic Enhanced vs. Bond Fund Investor | Strategic Enhanced vs. Cavanal Hill Hedged | Strategic Enhanced vs. Limited Duration Fund | Strategic Enhanced vs. Cavanal Hill Ultra |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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