Correlation Between Arrow Financial and Mosaic
Can any of the company-specific risk be diversified away by investing in both Arrow Financial and Mosaic 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 Arrow Financial and Mosaic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow Financial and The Mosaic, you can compare the effects of market volatilities on Arrow Financial and Mosaic 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 Arrow Financial with a short position of Mosaic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Financial and Mosaic.
Diversification Opportunities for Arrow Financial and Mosaic
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Arrow and Mosaic is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Financial and The Mosaic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mosaic and Arrow Financial 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 Arrow Financial are associated (or correlated) with Mosaic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mosaic has no effect on the direction of Arrow Financial i.e., Arrow Financial and Mosaic go up and down completely randomly.
Pair Corralation between Arrow Financial and Mosaic
Given the investment horizon of 90 days Arrow Financial is expected to generate 1.38 times more return on investment than Mosaic. However, Arrow Financial is 1.38 times more volatile than The Mosaic. It trades about 0.2 of its potential returns per unit of risk. The Mosaic is currently generating about -0.06 per unit of risk. If you would invest 2,921 in Arrow Financial on August 28, 2024 and sell it today you would earn a total of 414.00 from holding Arrow Financial or generate 14.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arrow Financial vs. The Mosaic
Performance |
| Timeline |
| Arrow Financial |
| Mosaic |
Arrow Financial and Mosaic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Financial and Mosaic
The main advantage of trading using opposite Arrow Financial and Mosaic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Financial position performs unexpectedly, Mosaic 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 Mosaic will offset losses from the drop in Mosaic's long position.| Arrow Financial vs. Fifth Third Bancorp | Arrow Financial vs. Huntington Bancshares Incorporated | Arrow Financial vs. Comerica | Arrow Financial vs. MT Bank |
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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