Correlation Between K2 Alternative and Cref Money
Can any of the company-specific risk be diversified away by investing in both K2 Alternative and Cref Money 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 K2 Alternative and Cref Money into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between K2 Alternative Strategies and Cref Money Market, you can compare the effects of market volatilities on K2 Alternative and Cref Money 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 K2 Alternative with a short position of Cref Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of K2 Alternative and Cref Money.
Diversification Opportunities for K2 Alternative and Cref Money
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between FABZX and Cref is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding K2 Alternative Strategies and Cref Money Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cref Money Market and K2 Alternative 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 K2 Alternative Strategies are associated (or correlated) with Cref Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cref Money Market has no effect on the direction of K2 Alternative i.e., K2 Alternative and Cref Money go up and down completely randomly.
Pair Corralation between K2 Alternative and Cref Money
Assuming the 90 days horizon K2 Alternative Strategies is expected to generate 9.46 times more return on investment than Cref Money. However, K2 Alternative is 9.46 times more volatile than Cref Money Market. It trades about 0.17 of its potential returns per unit of risk. Cref Money Market is currently generating about 0.96 per unit of risk. If you would invest 1,090 in K2 Alternative Strategies on September 12, 2024 and sell it today you would earn a total of 132.00 from holding K2 Alternative Strategies or generate 12.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
K2 Alternative Strategies vs. Cref Money Market
Performance |
| Timeline |
| K2 Alternative Strategies |
| Cref Money Market |
K2 Alternative and Cref Money Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with K2 Alternative and Cref Money
The main advantage of trading using opposite K2 Alternative and Cref Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if K2 Alternative position performs unexpectedly, Cref Money 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 Cref Money will offset losses from the drop in Cref Money's long position.| K2 Alternative vs. Cref Money Market | K2 Alternative vs. Ubs Money Series | K2 Alternative vs. John Hancock Money | K2 Alternative vs. Edward Jones Money |
| Cref Money vs. Vanguard Total Stock | Cref Money vs. Vanguard 500 Index | Cref Money vs. Vanguard Total Stock | Cref Money vs. Vanguard Total Stock |
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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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