Correlation Between The Arbitrage and Arbitrage Credit
Can any of the company-specific risk be diversified away by investing in both The Arbitrage and Arbitrage Credit 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 The Arbitrage and Arbitrage Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Arbitrage Fund and The Arbitrage Credit, you can compare the effects of market volatilities on The Arbitrage and Arbitrage Credit 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 The Arbitrage with a short position of Arbitrage Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Arbitrage and Arbitrage Credit.
Diversification Opportunities for The Arbitrage and Arbitrage Credit
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between The and Arbitrage is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding The Arbitrage Fund and The Arbitrage Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbitrage Credit and The 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 The Arbitrage Fund are associated (or correlated) with Arbitrage Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arbitrage Credit has no effect on the direction of The Arbitrage i.e., The Arbitrage and Arbitrage Credit go up and down completely randomly.
Pair Corralation between The Arbitrage and Arbitrage Credit
Assuming the 90 days horizon The Arbitrage Fund is expected to generate 0.88 times more return on investment than Arbitrage Credit. However, The Arbitrage Fund is 1.14 times less risky than Arbitrage Credit. It trades about 0.79 of its potential returns per unit of risk. The Arbitrage Credit is currently generating about 0.25 per unit of risk. If you would invest 1,280 in The Arbitrage Fund on October 20, 2024 and sell it today you would earn a total of 22.00 from holding The Arbitrage Fund or generate 1.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Arbitrage Fund vs. The Arbitrage Credit
Performance |
| Timeline |
| The Arbitrage |
| Arbitrage Credit |
The Arbitrage and Arbitrage Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Arbitrage and Arbitrage Credit
The main advantage of trading using opposite The Arbitrage and Arbitrage Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Arbitrage position performs unexpectedly, Arbitrage Credit 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 Arbitrage Credit will offset losses from the drop in Arbitrage Credit's long position.| The Arbitrage vs. The Merger Fund | The Arbitrage vs. Calamos Market Neutral | The Arbitrage vs. Hussman Strategic Growth | The Arbitrage vs. Gateway Fund Class |
| Arbitrage Credit vs. Semiconductor Ultrasector Profund | Arbitrage Credit vs. Boyd Watterson Limited | Arbitrage Credit vs. Rbc Microcap Value | Arbitrage Credit vs. Ab E Opportunities |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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