Correlation Between Kensington Managed and Anchor Risk
Can any of the company-specific risk be diversified away by investing in both Kensington Managed 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 Kensington Managed and Anchor Risk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kensington Managed Income and Anchor Risk Managed, you can compare the effects of market volatilities on Kensington Managed 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 Kensington Managed with a short position of Anchor Risk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kensington Managed and Anchor Risk.
Diversification Opportunities for Kensington Managed and Anchor Risk
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kensington and Anchor is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Kensington Managed Income 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 Kensington Managed 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 Kensington Managed Income 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 Kensington Managed i.e., Kensington Managed and Anchor Risk go up and down completely randomly.
Pair Corralation between Kensington Managed and Anchor Risk
Assuming the 90 days horizon Kensington Managed Income is expected to generate 0.22 times more return on investment than Anchor Risk. However, Kensington Managed Income is 4.45 times less risky than Anchor Risk. It trades about 0.07 of its potential returns per unit of risk. Anchor Risk Managed is currently generating about -0.02 per unit of risk. If you would invest 982.00 in Kensington Managed Income on November 27, 2024 and sell it today you would earn a total of 2.00 from holding Kensington Managed Income or generate 0.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kensington Managed Income vs. Anchor Risk Managed
Performance |
| Timeline |
| Kensington Managed Income |
| Anchor Risk Managed |
Kensington Managed and Anchor Risk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kensington Managed and Anchor Risk
The main advantage of trading using opposite Kensington Managed and Anchor Risk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kensington Managed 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.| Kensington Managed vs. Legg Mason Bw | Kensington Managed vs. Ab Global Bond | Kensington Managed vs. Rbc Global Equity | Kensington Managed vs. Ms Global Fixed |
| Anchor Risk vs. Transamerica Funds | Anchor Risk vs. Qs International Equity | Anchor Risk vs. Ultra Short Fixed Income | Anchor Risk vs. Bbh Partner Fund |
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.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |