Correlation Between Atac Inflation and Kensington Active
Can any of the company-specific risk be diversified away by investing in both Atac Inflation and Kensington Active 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 Atac Inflation and Kensington Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atac Inflation Rotation and Kensington Active Advantage, you can compare the effects of market volatilities on Atac Inflation and Kensington Active 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 Atac Inflation with a short position of Kensington Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atac Inflation and Kensington Active.
Diversification Opportunities for Atac Inflation and Kensington Active
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Atac and Kensington is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Atac Inflation Rotation and Kensington Active Advantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kensington Active and Atac Inflation 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 Atac Inflation Rotation are associated (or correlated) with Kensington Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kensington Active has no effect on the direction of Atac Inflation i.e., Atac Inflation and Kensington Active go up and down completely randomly.
Pair Corralation between Atac Inflation and Kensington Active
Assuming the 90 days horizon Atac Inflation Rotation is expected to generate 2.91 times more return on investment than Kensington Active. However, Atac Inflation is 2.91 times more volatile than Kensington Active Advantage. It trades about 0.04 of its potential returns per unit of risk. Kensington Active Advantage is currently generating about 0.09 per unit of risk. If you would invest 3,040 in Atac Inflation Rotation on September 12, 2024 and sell it today you would earn a total of 430.00 from holding Atac Inflation Rotation or generate 14.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
Atac Inflation Rotation vs. Kensington Active Advantage
Performance |
| Timeline |
| Atac Inflation Rotation |
| Kensington Active |
Atac Inflation and Kensington Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atac Inflation and Kensington Active
The main advantage of trading using opposite Atac Inflation and Kensington Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atac Inflation position performs unexpectedly, Kensington Active 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 Kensington Active will offset losses from the drop in Kensington Active's long position.| Atac Inflation vs. SCOR PK | Atac Inflation vs. Morningstar Unconstrained Allocation | Atac Inflation vs. Via Renewables | Atac Inflation vs. Bondbloxx ETF Trust |
| Kensington Active vs. Schwab Treasury Inflation | Kensington Active vs. Lord Abbett Inflation | Kensington Active vs. Atac Inflation Rotation | Kensington Active vs. Arrow Managed Futures |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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