Correlation Between Absolute Convertible and Buffalo Mid
Can any of the company-specific risk be diversified away by investing in both Absolute Convertible and Buffalo Mid 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 Absolute Convertible and Buffalo Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Absolute Convertible Arbitrage and Buffalo Mid Cap, you can compare the effects of market volatilities on Absolute Convertible and Buffalo Mid 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 Absolute Convertible with a short position of Buffalo Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Absolute Convertible and Buffalo Mid.
Diversification Opportunities for Absolute Convertible and Buffalo Mid
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Absolute and Buffalo is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Absolute Convertible Arbitrage and Buffalo Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Buffalo Mid Cap and Absolute Convertible 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 Absolute Convertible Arbitrage are associated (or correlated) with Buffalo Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Buffalo Mid Cap has no effect on the direction of Absolute Convertible i.e., Absolute Convertible and Buffalo Mid go up and down completely randomly.
Pair Corralation between Absolute Convertible and Buffalo Mid
Assuming the 90 days horizon Absolute Convertible Arbitrage is expected to generate 0.03 times more return on investment than Buffalo Mid. However, Absolute Convertible Arbitrage is 32.83 times less risky than Buffalo Mid. It trades about 0.38 of its potential returns per unit of risk. Buffalo Mid Cap is currently generating about -0.14 per unit of risk. If you would invest 1,146 in Absolute Convertible Arbitrage on September 13, 2024 and sell it today you would earn a total of 5.00 from holding Absolute Convertible Arbitrage or generate 0.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Absolute Convertible Arbitrage vs. Buffalo Mid Cap
Performance |
| Timeline |
| Absolute Convertible |
| Buffalo Mid Cap |
Absolute Convertible and Buffalo Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Absolute Convertible and Buffalo Mid
The main advantage of trading using opposite Absolute Convertible and Buffalo Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Absolute Convertible position performs unexpectedly, Buffalo Mid 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 Buffalo Mid will offset losses from the drop in Buffalo Mid's long position.| Absolute Convertible vs. Advent Claymore Convertible | Absolute Convertible vs. Fidelity Sai Convertible | Absolute Convertible vs. Virtus Convertible | Absolute Convertible vs. Putnam Convertible Incm Gwth |
| Buffalo Mid vs. Artisan Select Equity | Buffalo Mid vs. Qs Global Equity | Buffalo Mid vs. Balanced Fund Retail | Buffalo Mid vs. Gmo Global Equity |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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