Correlation Between Black Oak and Floating Rate
Can any of the company-specific risk be diversified away by investing in both Black Oak and Floating Rate 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 Floating Rate 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 Floating Rate Fund, you can compare the effects of market volatilities on Black Oak and Floating Rate 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 Floating Rate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Oak and Floating Rate.
Diversification Opportunities for Black Oak and Floating Rate
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Black and Floating is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Black Oak Emerging and Floating Rate Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Floating Rate 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 Floating Rate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Floating Rate has no effect on the direction of Black Oak i.e., Black Oak and Floating Rate go up and down completely randomly.
Pair Corralation between Black Oak and Floating Rate
Assuming the 90 days horizon Black Oak Emerging is expected to generate 21.47 times more return on investment than Floating Rate. However, Black Oak is 21.47 times more volatile than Floating Rate Fund. It trades about 0.14 of its potential returns per unit of risk. Floating Rate Fund is currently generating about 0.31 per unit of risk. If you would invest 798.00 in Black Oak Emerging on September 4, 2024 and sell it today you would earn a total of 30.00 from holding Black Oak Emerging or generate 3.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Black Oak Emerging vs. Floating Rate Fund
Performance |
| Timeline |
| Black Oak Emerging |
| Floating Rate |
Black Oak and Floating Rate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Black Oak and Floating Rate
The main advantage of trading using opposite Black Oak and Floating Rate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Oak position performs unexpectedly, Floating Rate 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 Floating Rate will offset losses from the drop in Floating Rate'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 |
| Floating Rate vs. Eventide Healthcare Life | Floating Rate vs. Baillie Gifford Health | Floating Rate vs. Allianzgi Health Sciences | Floating Rate vs. Live Oak Health |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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