Correlation Between Alphacentric Hedged and Alphacentric Symmetry
Can any of the company-specific risk be diversified away by investing in both Alphacentric Hedged and Alphacentric Symmetry 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 Alphacentric Symmetry 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 Alphacentric Symmetry Strategy, you can compare the effects of market volatilities on Alphacentric Hedged and Alphacentric Symmetry 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 Alphacentric Symmetry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphacentric Hedged and Alphacentric Symmetry.
Diversification Opportunities for Alphacentric Hedged and Alphacentric Symmetry
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Alphacentric and Alphacentric is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Alphacentric Hedged Market and Alphacentric Symmetry Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alphacentric Symmetry 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 Alphacentric Symmetry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alphacentric Symmetry has no effect on the direction of Alphacentric Hedged i.e., Alphacentric Hedged and Alphacentric Symmetry go up and down completely randomly.
Pair Corralation between Alphacentric Hedged and Alphacentric Symmetry
Assuming the 90 days horizon Alphacentric Hedged Market is expected to generate 0.99 times more return on investment than Alphacentric Symmetry. However, Alphacentric Hedged Market is 1.01 times less risky than Alphacentric Symmetry. It trades about 0.08 of its potential returns per unit of risk. Alphacentric Symmetry Strategy is currently generating about 0.04 per unit of risk. If you would invest 2,406 in Alphacentric Hedged Market on August 29, 2024 and sell it today you would earn a total of 558.00 from holding Alphacentric Hedged Market or generate 23.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alphacentric Hedged Market vs. Alphacentric Symmetry Strategy
Performance |
| Timeline |
| Alphacentric Hedged |
| Alphacentric Symmetry |
Alphacentric Hedged and Alphacentric Symmetry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alphacentric Hedged and Alphacentric Symmetry
The main advantage of trading using opposite Alphacentric Hedged and Alphacentric Symmetry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphacentric Hedged position performs unexpectedly, Alphacentric Symmetry 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 Alphacentric Symmetry will offset losses from the drop in Alphacentric Symmetry's long position.| Alphacentric Hedged vs. Jpmorgan Hedged Equity | Alphacentric Hedged vs. Jpmorgan Hedged Equity | Alphacentric Hedged vs. Gateway Fund Class | Alphacentric Hedged vs. Gateway Fund Class |
| Alphacentric Symmetry vs. Vanguard Emerging Markets | Alphacentric Symmetry vs. Kinetics Market Opportunities | Alphacentric Symmetry vs. Astor Longshort Fund | Alphacentric Symmetry vs. Mirova Global Green |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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