Correlation Between Alphacentric Hedged and Aggressive Growth
Can any of the company-specific risk be diversified away by investing in both Alphacentric Hedged and Aggressive Growth 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 Alphacentric Hedged and Aggressive Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alphacentric Hedged Market and Aggressive Growth Allocation, you can compare the effects of market volatilities on Alphacentric Hedged and Aggressive Growth 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 Alphacentric Hedged with a short position of Aggressive Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphacentric Hedged and Aggressive Growth.
Diversification Opportunities for Alphacentric Hedged and Aggressive Growth
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Alphacentric and Aggressive is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Alphacentric Hedged Market and Aggressive Growth Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aggressive Growth and Alphacentric Hedged 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 Alphacentric Hedged Market are associated (or correlated) with Aggressive Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aggressive Growth has no effect on the direction of Alphacentric Hedged i.e., Alphacentric Hedged and Aggressive Growth go up and down completely randomly.
Pair Corralation between Alphacentric Hedged and Aggressive Growth
Assuming the 90 days horizon Alphacentric Hedged is expected to generate 1.53 times less return on investment than Aggressive Growth. But when comparing it to its historical volatility, Alphacentric Hedged Market is 1.0 times less risky than Aggressive Growth. It trades about 0.1 of its potential returns per unit of risk. Aggressive Growth Allocation is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,128 in Aggressive Growth Allocation on November 4, 2024 and sell it today you would earn a total of 23.00 from holding Aggressive Growth Allocation or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alphacentric Hedged Market vs. Aggressive Growth Allocation
Performance |
| Timeline |
| Alphacentric Hedged |
| Aggressive Growth |
Alphacentric Hedged and Aggressive Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alphacentric Hedged and Aggressive Growth
The main advantage of trading using opposite Alphacentric Hedged and Aggressive Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphacentric Hedged position performs unexpectedly, Aggressive Growth 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 Aggressive Growth will offset losses from the drop in Aggressive Growth's long position.The idea behind Alphacentric Hedged Market and Aggressive Growth Allocation pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Aggressive Growth vs. Precious Metals And | Aggressive Growth vs. Franklin Gold Precious | Aggressive Growth vs. Vy Goldman Sachs | Aggressive Growth vs. James Balanced Golden |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |