Correlation Between Cutler Equity and Quantitative Longshort
Can any of the company-specific risk be diversified away by investing in both Cutler Equity and Quantitative Longshort 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 Cutler Equity and Quantitative Longshort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cutler Equity and Quantitative Longshort Equity, you can compare the effects of market volatilities on Cutler Equity and Quantitative Longshort 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 Cutler Equity with a short position of Quantitative Longshort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cutler Equity and Quantitative Longshort.
Diversification Opportunities for Cutler Equity and Quantitative Longshort
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cutler and Quantitative is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Cutler Equity and Quantitative Longshort Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quantitative Longshort and Cutler Equity 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 Cutler Equity are associated (or correlated) with Quantitative Longshort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quantitative Longshort has no effect on the direction of Cutler Equity i.e., Cutler Equity and Quantitative Longshort go up and down completely randomly.
Pair Corralation between Cutler Equity and Quantitative Longshort
Assuming the 90 days horizon Cutler Equity is expected to generate 1.43 times more return on investment than Quantitative Longshort. However, Cutler Equity is 1.43 times more volatile than Quantitative Longshort Equity. It trades about 0.2 of its potential returns per unit of risk. Quantitative Longshort Equity is currently generating about 0.15 per unit of risk. If you would invest 2,731 in Cutler Equity on September 2, 2024 and sell it today you would earn a total of 216.00 from holding Cutler Equity or generate 7.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cutler Equity vs. Quantitative Longshort Equity
Performance |
| Timeline |
| Cutler Equity |
| Quantitative Longshort |
Cutler Equity and Quantitative Longshort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cutler Equity and Quantitative Longshort
The main advantage of trading using opposite Cutler Equity and Quantitative Longshort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cutler Equity position performs unexpectedly, Quantitative Longshort 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 Quantitative Longshort will offset losses from the drop in Quantitative Longshort's long position.| Cutler Equity vs. Siit Emerging Markets | Cutler Equity vs. Aqr Sustainable Long Short | Cutler Equity vs. Pnc Emerging Markets | Cutler Equity vs. Doubleline Emerging Markets |
| Quantitative Longshort vs. The Hartford Small | Quantitative Longshort vs. Small Midcap Dividend Income | Quantitative Longshort vs. Jpmorgan Small Cap | Quantitative Longshort vs. Vanguard Small Cap Growth |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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