Correlation Between Absolute Convertible and Strategic Asset
Can any of the company-specific risk be diversified away by investing in both Absolute Convertible and Strategic Asset 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 Strategic Asset 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 Strategic Asset Management, you can compare the effects of market volatilities on Absolute Convertible and Strategic Asset 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 Strategic Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Absolute Convertible and Strategic Asset.
Diversification Opportunities for Absolute Convertible and Strategic Asset
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Absolute and Strategic is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Absolute Convertible Arbitrage and Strategic Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Asset Mana 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 Strategic Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Asset Mana has no effect on the direction of Absolute Convertible i.e., Absolute Convertible and Strategic Asset go up and down completely randomly.
Pair Corralation between Absolute Convertible and Strategic Asset
Assuming the 90 days horizon Absolute Convertible Arbitrage is expected to under-perform the Strategic Asset. But the mutual fund apears to be less risky and, when comparing its historical volatility, Absolute Convertible Arbitrage is 1.0 times less risky than Strategic Asset. The mutual fund trades about -0.16 of its potential returns per unit of risk. The Strategic Asset Management is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,727 in Strategic Asset Management on September 20, 2024 and sell it today you would earn a total of 19.00 from holding Strategic Asset Management or generate 1.1% 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. Strategic Asset Management
Performance |
| Timeline |
| Absolute Convertible |
| Strategic Asset Mana |
Absolute Convertible and Strategic Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Absolute Convertible and Strategic Asset
The main advantage of trading using opposite Absolute Convertible and Strategic Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Absolute Convertible position performs unexpectedly, Strategic Asset 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 Asset will offset losses from the drop in Strategic Asset's long position.| Absolute Convertible vs. Calamos Dynamic Convertible | Absolute Convertible vs. Fidelity Sai Convertible | Absolute Convertible vs. Virtus Convertible | Absolute Convertible vs. Gabelli Convertible And |
| Strategic Asset vs. Allianzgi Convertible Income | Strategic Asset vs. Rationalpier 88 Convertible | Strategic Asset vs. Absolute Convertible Arbitrage | Strategic Asset vs. Advent Claymore Convertible |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |