Correlation Between Arrow Financial and 05565QDM7

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Arrow Financial and 05565QDM7 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 05565QDM7 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow Financial and BP CAP MKTS, you can compare the effects of market volatilities on Arrow Financial and 05565QDM7 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 05565QDM7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Financial and 05565QDM7.

Diversification Opportunities for Arrow Financial and 05565QDM7

-0.53
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Arrow and 05565QDM7 is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Financial and BP CAP MKTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BP CAP MKTS 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 05565QDM7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BP CAP MKTS has no effect on the direction of Arrow Financial i.e., Arrow Financial and 05565QDM7 go up and down completely randomly.

Pair Corralation between Arrow Financial and 05565QDM7

Given the investment horizon of 90 days Arrow Financial is expected to generate 2.69 times more return on investment than 05565QDM7. However, Arrow Financial is 2.69 times more volatile than BP CAP MKTS. It trades about 0.05 of its potential returns per unit of risk. BP CAP MKTS is currently generating about -0.03 per unit of risk. If you would invest  2,643  in Arrow Financial on August 31, 2024 and sell it today you would earn a total of  657.00  from holding Arrow Financial or generate 24.86% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy87.55%
ValuesDaily Returns

Arrow Financial  vs.  BP CAP MKTS

 Performance 
       Timeline  
Arrow Financial 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Arrow Financial are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, Arrow Financial showed solid returns over the last few months and may actually be approaching a breakup point.
BP CAP MKTS 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days BP CAP MKTS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for BP CAP MKTS investors.

Arrow Financial and 05565QDM7 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Arrow Financial and 05565QDM7

The main advantage of trading using opposite Arrow Financial and 05565QDM7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Financial position performs unexpectedly, 05565QDM7 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 05565QDM7 will offset losses from the drop in 05565QDM7's long position.
The idea behind Arrow Financial and BP CAP MKTS 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.
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.

Other Complementary Tools

Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
ETFs
Find actively traded Exchange Traded Funds (ETF) from around the world
Equity Valuation
Check real value of public entities based on technical and fundamental data
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Commodity Directory
Find actively traded commodities issued by global exchanges