Correlation Between Frost Credit and Frost Total
Can any of the company-specific risk be diversified away by investing in both Frost Credit and Frost Total 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 Credit and Frost Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Frost Credit Fund and Frost Total Return, you can compare the effects of market volatilities on Frost Credit and Frost Total 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 Credit with a short position of Frost Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frost Credit and Frost Total.
Diversification Opportunities for Frost Credit and Frost Total
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Frost and FROST is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Frost Credit Fund and Frost Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frost Total Return and Frost Credit 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 Credit Fund are associated (or correlated) with Frost Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frost Total Return has no effect on the direction of Frost Credit i.e., Frost Credit and Frost Total go up and down completely randomly.
Pair Corralation between Frost Credit and Frost Total
Assuming the 90 days horizon Frost Credit Fund is expected to generate 0.8 times more return on investment than Frost Total. However, Frost Credit Fund is 1.25 times less risky than Frost Total. It trades about 0.1 of its potential returns per unit of risk. Frost Total Return is currently generating about 0.08 per unit of risk. If you would invest 946.00 in Frost Credit Fund on September 1, 2024 and sell it today you would earn a total of 5.00 from holding Frost Credit Fund or generate 0.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Frost Credit Fund vs. Frost Total Return
Performance |
| Timeline |
| Frost Credit |
| Frost Total Return |
Frost Credit and Frost Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Frost Credit and Frost Total
The main advantage of trading using opposite Frost Credit and Frost Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frost Credit position performs unexpectedly, Frost Total 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 Total will offset losses from the drop in Frost Total's long position.| Frost Credit vs. Frost Growth Equity | Frost Credit vs. Frost Low Duration | Frost Credit vs. Frost Total Return | Frost Credit vs. Frost Total Return |
| 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 |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |