Correlation Between Growth Fund and Arrow Managed
Can any of the company-specific risk be diversified away by investing in both Growth Fund and Arrow Managed 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 Growth Fund and Arrow Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Fund Of and Arrow Managed Futures, you can compare the effects of market volatilities on Growth Fund and Arrow Managed 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 Growth Fund with a short position of Arrow Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Fund and Arrow Managed.
Diversification Opportunities for Growth Fund and Arrow Managed
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Growth and Arrow is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Of and Arrow Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Managed Futures and Growth Fund 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 Growth Fund Of are associated (or correlated) with Arrow Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Managed Futures has no effect on the direction of Growth Fund i.e., Growth Fund and Arrow Managed go up and down completely randomly.
Pair Corralation between Growth Fund and Arrow Managed
Assuming the 90 days horizon Growth Fund Of is expected to generate 0.67 times more return on investment than Arrow Managed. However, Growth Fund Of is 1.48 times less risky than Arrow Managed. It trades about 0.19 of its potential returns per unit of risk. Arrow Managed Futures is currently generating about 0.03 per unit of risk. If you would invest 7,878 in Growth Fund Of on August 27, 2024 and sell it today you would earn a total of 323.00 from holding Growth Fund Of or generate 4.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Fund Of vs. Arrow Managed Futures
Performance |
| Timeline |
| Growth Fund |
| Arrow Managed Futures |
Growth Fund and Arrow Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Fund and Arrow Managed
The main advantage of trading using opposite Growth Fund and Arrow Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Fund position performs unexpectedly, Arrow Managed 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 Arrow Managed will offset losses from the drop in Arrow Managed's long position.| Growth Fund vs. Income Fund Of | Growth Fund vs. New World Fund | Growth Fund vs. American Mutual Fund | Growth Fund vs. American Mutual Fund |
| Arrow Managed vs. Leggmason Partners Institutional | Arrow Managed vs. Acm Dynamic Opportunity | Arrow Managed vs. Qs Large Cap | Arrow Managed vs. Falcon Focus Scv |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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