Correlation Between Gateway Fund and Anchor Risk
Can any of the company-specific risk be diversified away by investing in both Gateway Fund and Anchor Risk 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 Gateway Fund and Anchor Risk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gateway Fund Class and Anchor Risk Managed, you can compare the effects of market volatilities on Gateway Fund and Anchor Risk 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 Gateway Fund with a short position of Anchor Risk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gateway Fund and Anchor Risk.
Diversification Opportunities for Gateway Fund and Anchor Risk
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gateway and Anchor is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Gateway Fund Class and Anchor Risk Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anchor Risk Managed and Gateway Fund 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 Gateway Fund Class are associated (or correlated) with Anchor Risk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anchor Risk Managed has no effect on the direction of Gateway Fund i.e., Gateway Fund and Anchor Risk go up and down completely randomly.
Pair Corralation between Gateway Fund and Anchor Risk
Assuming the 90 days horizon Gateway Fund Class is expected to generate 1.0 times more return on investment than Anchor Risk. However, Gateway Fund Class is 1.0 times less risky than Anchor Risk. It trades about 0.13 of its potential returns per unit of risk. Anchor Risk Managed is currently generating about 0.03 per unit of risk. If you would invest 3,578 in Gateway Fund Class on August 29, 2024 and sell it today you would earn a total of 1,121 from holding Gateway Fund Class or generate 31.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gateway Fund Class vs. Anchor Risk Managed
Performance |
| Timeline |
| Gateway Fund Class |
| Anchor Risk Managed |
Gateway Fund and Anchor Risk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gateway Fund and Anchor Risk
The main advantage of trading using opposite Gateway Fund and Anchor Risk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gateway Fund position performs unexpectedly, Anchor Risk 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 Anchor Risk will offset losses from the drop in Anchor Risk's long position.| Gateway Fund vs. Bbh Intermediate Municipal | Gateway Fund vs. Federated Government Ultrashort | Gateway Fund vs. Nebraska Municipal Fund | Gateway Fund vs. Baird Strategic Municipal |
| Anchor Risk vs. Jpmorgan Hedged Equity | Anchor Risk vs. Jpmorgan Hedged Equity | Anchor Risk vs. Gateway Fund Class | Anchor Risk vs. Gateway Fund Class |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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