Correlation Between Pro Blend and Locorr Market
Can any of the company-specific risk be diversified away by investing in both Pro Blend and Locorr Market 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 Pro Blend and Locorr Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pro Blend Moderate Term and Locorr Market Trend, you can compare the effects of market volatilities on Pro Blend and Locorr Market 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 Pro Blend with a short position of Locorr Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pro Blend and Locorr Market.
Diversification Opportunities for Pro Blend and Locorr Market
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pro and Locorr is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Pro Blend Moderate Term and Locorr Market Trend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Locorr Market Trend and Pro Blend 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 Pro Blend Moderate Term are associated (or correlated) with Locorr Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Locorr Market Trend has no effect on the direction of Pro Blend i.e., Pro Blend and Locorr Market go up and down completely randomly.
Pair Corralation between Pro Blend and Locorr Market
Assuming the 90 days horizon Pro Blend Moderate Term is expected to generate 0.25 times more return on investment than Locorr Market. However, Pro Blend Moderate Term is 3.93 times less risky than Locorr Market. It trades about 0.24 of its potential returns per unit of risk. Locorr Market Trend is currently generating about -0.12 per unit of risk. If you would invest 1,481 in Pro Blend Moderate Term on September 14, 2024 and sell it today you would earn a total of 24.00 from holding Pro Blend Moderate Term or generate 1.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pro Blend Moderate Term vs. Locorr Market Trend
Performance |
| Timeline |
| Pro Blend Moderate |
| Locorr Market Trend |
Pro Blend and Locorr Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pro Blend and Locorr Market
The main advantage of trading using opposite Pro Blend and Locorr Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pro Blend position performs unexpectedly, Locorr Market 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 Locorr Market will offset losses from the drop in Locorr Market's long position.| Pro Blend vs. Manning Napier Callodine | Pro Blend vs. Manning Napier Callodine | Pro Blend vs. Manning Napier Callodine | Pro Blend vs. Pro Blend Extended Term |
| Locorr Market vs. Pro Blend Moderate Term | Locorr Market vs. Fidelity Managed Retirement | Locorr Market vs. Deutsche Multi Asset Moderate | Locorr Market vs. Strategic Allocation Moderate |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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