Correlation Between Aam Select and Arrow Managed
Can any of the company-specific risk be diversified away by investing in both Aam Select and Arrow Managed 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 Aam Select and Arrow Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aam Select Income and Arrow Managed Futures, you can compare the effects of market volatilities on Aam Select and Arrow Managed 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 Aam Select with a short position of Arrow Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aam Select and Arrow Managed.
Diversification Opportunities for Aam Select and Arrow Managed
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aam and Arrow is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Aam Select Income and Arrow Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Managed Futures and Aam Select 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 Aam Select Income are associated (or correlated) with Arrow Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Managed Futures has no effect on the direction of Aam Select i.e., Aam Select and Arrow Managed go up and down completely randomly.
Pair Corralation between Aam Select and Arrow Managed
Assuming the 90 days horizon Aam Select Income is expected to generate 0.27 times more return on investment than Arrow Managed. However, Aam Select Income is 3.77 times less risky than Arrow Managed. It trades about 0.1 of its potential returns per unit of risk. Arrow Managed Futures is currently generating about 0.02 per unit of risk. If you would invest 856.00 in Aam Select Income on September 4, 2024 and sell it today you would earn a total of 74.00 from holding Aam Select Income or generate 8.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aam Select Income vs. Arrow Managed Futures
Performance |
| Timeline |
| Aam Select Income |
| Arrow Managed Futures |
Aam Select and Arrow Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aam Select and Arrow Managed
The main advantage of trading using opposite Aam Select and Arrow Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aam Select position performs unexpectedly, Arrow Managed 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 Arrow Managed will offset losses from the drop in Arrow Managed's long position.| Aam Select vs. Aqr Managed Futures | Aam Select vs. Inflation Protected Bond Fund | Aam Select vs. American Funds Inflation | Aam Select vs. Guidepath Managed Futures |
| Arrow Managed vs. Growth Strategy Fund | Arrow Managed vs. Artisan Thematic Fund | Arrow Managed vs. Nationwide Global Equity | Arrow Managed vs. Volumetric Fund Volumetric |
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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