Correlation Between Black Oak and At Mid
Can any of the company-specific risk be diversified away by investing in both Black Oak and At 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 Black Oak and At Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Black Oak Emerging and At Mid Cap, you can compare the effects of market volatilities on Black Oak and At 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 Black Oak with a short position of At Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Oak and At Mid.
Diversification Opportunities for Black Oak and At Mid
Very poor diversification
The 3 months correlation between Black and AWMIX is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Black Oak Emerging and At Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on At Mid Cap and Black Oak 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 Black Oak Emerging are associated (or correlated) with At Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of At Mid Cap has no effect on the direction of Black Oak i.e., Black Oak and At Mid go up and down completely randomly.
Pair Corralation between Black Oak and At Mid
Assuming the 90 days horizon Black Oak is expected to generate 2.34 times less return on investment than At Mid. In addition to that, Black Oak is 1.21 times more volatile than At Mid Cap. It trades about 0.13 of its total potential returns per unit of risk. At Mid Cap is currently generating about 0.37 per unit of volatility. If you would invest 2,047 in At Mid Cap on September 1, 2024 and sell it today you would earn a total of 181.00 from holding At Mid Cap or generate 8.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Black Oak Emerging vs. At Mid Cap
Performance |
| Timeline |
| Black Oak Emerging |
| At Mid Cap |
Black Oak and At Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Black Oak and At Mid
The main advantage of trading using opposite Black Oak and At Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Oak position performs unexpectedly, At 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 At Mid will offset losses from the drop in At Mid's long position.| Black Oak vs. Red Oak Technology | Black Oak vs. Pin Oak Equity | Black Oak vs. White Oak Select | Black Oak vs. Live Oak Health |
| At Mid vs. Pace International Emerging | At Mid vs. Black Oak Emerging | At Mid vs. Transamerica Emerging Markets | At Mid vs. Goldman Sachs Emerging |
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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