Correlation Between Accelerate Arbitrage and NBI Unconstrained
Can any of the company-specific risk be diversified away by investing in both Accelerate Arbitrage and NBI Unconstrained 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 Accelerate Arbitrage and NBI Unconstrained into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Accelerate Arbitrage and NBI Unconstrained Fixed, you can compare the effects of market volatilities on Accelerate Arbitrage and NBI Unconstrained 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 Accelerate Arbitrage with a short position of NBI Unconstrained. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accelerate Arbitrage and NBI Unconstrained.
Diversification Opportunities for Accelerate Arbitrage and NBI Unconstrained
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Accelerate and NBI is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Accelerate Arbitrage and NBI Unconstrained Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NBI Unconstrained Fixed and Accelerate Arbitrage 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 Accelerate Arbitrage are associated (or correlated) with NBI Unconstrained. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NBI Unconstrained Fixed has no effect on the direction of Accelerate Arbitrage i.e., Accelerate Arbitrage and NBI Unconstrained go up and down completely randomly.
Pair Corralation between Accelerate Arbitrage and NBI Unconstrained
Assuming the 90 days trading horizon Accelerate Arbitrage is expected to generate 4.26 times more return on investment than NBI Unconstrained. However, Accelerate Arbitrage is 4.26 times more volatile than NBI Unconstrained Fixed. It trades about 0.01 of its potential returns per unit of risk. NBI Unconstrained Fixed is currently generating about 0.04 per unit of risk. If you would invest 2,508 in Accelerate Arbitrage on September 3, 2024 and sell it today you would earn a total of 117.00 from holding Accelerate Arbitrage or generate 4.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.02% |
| Values | Daily Returns |
Accelerate Arbitrage vs. NBI Unconstrained Fixed
Performance |
| Timeline |
| Accelerate Arbitrage |
| NBI Unconstrained Fixed |
Accelerate Arbitrage and NBI Unconstrained Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Accelerate Arbitrage and NBI Unconstrained
The main advantage of trading using opposite Accelerate Arbitrage and NBI Unconstrained positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accelerate Arbitrage position performs unexpectedly, NBI Unconstrained 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 NBI Unconstrained will offset losses from the drop in NBI Unconstrained's long position.The idea behind Accelerate Arbitrage and NBI Unconstrained Fixed pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| NBI Unconstrained vs. NBI High Yield | NBI Unconstrained vs. NBI Active Canadian | NBI Unconstrained vs. Picton Mahoney Fortified | NBI Unconstrained vs. NBI Liquid Alternatives |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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