Correlation Between Frost Total and Frost Kempner
Can any of the company-specific risk be diversified away by investing in both Frost Total and Frost Kempner 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 Frost Total and Frost Kempner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Frost Total Return and Frost Kempner Multi Cap, you can compare the effects of market volatilities on Frost Total and Frost Kempner 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 Frost Total with a short position of Frost Kempner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frost Total and Frost Kempner.
Diversification Opportunities for Frost Total and Frost Kempner
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Frost and Frost is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Frost Total Return and Frost Kempner Multi Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frost Kempner Multi and Frost Total 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 Frost Total Return are associated (or correlated) with Frost Kempner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frost Kempner Multi has no effect on the direction of Frost Total i.e., Frost Total and Frost Kempner go up and down completely randomly.
Pair Corralation between Frost Total and Frost Kempner
Assuming the 90 days horizon Frost Total is expected to generate 6.87 times less return on investment than Frost Kempner. But when comparing it to its historical volatility, Frost Total Return is 2.66 times less risky than Frost Kempner. It trades about 0.09 of its potential returns per unit of risk. Frost Kempner Multi Cap is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1,227 in Frost Kempner Multi Cap on September 4, 2024 and sell it today you would earn a total of 46.00 from holding Frost Kempner Multi Cap or generate 3.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Frost Total Return vs. Frost Kempner Multi Cap
Performance |
| Timeline |
| Frost Total Return |
| Frost Kempner Multi |
Frost Total and Frost Kempner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Frost Total and Frost Kempner
The main advantage of trading using opposite Frost Total and Frost Kempner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frost Total position performs unexpectedly, Frost Kempner 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 Frost Kempner will offset losses from the drop in Frost Kempner's long position.| Frost Total vs. Baird Intermediate Bond | Frost Total vs. Kopernik Global All Cap | Frost Total vs. Invesco Real Estate | Frost Total vs. Oppenheimer Steelpath Mlp |
| Frost Kempner vs. Frost Growth Equity | Frost Kempner vs. Frost Low Duration | Frost Kempner vs. Frost Total Return | Frost Kempner vs. Frost Kempner Multi Cap |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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