Correlation Between KFA Mount and Advocate Capital
Can any of the company-specific risk be diversified away by investing in both KFA Mount and Advocate Capital 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 KFA Mount and Advocate Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KFA Mount Lucas and Advocate Capital Management, you can compare the effects of market volatilities on KFA Mount and Advocate Capital 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 KFA Mount with a short position of Advocate Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of KFA Mount and Advocate Capital.
Diversification Opportunities for KFA Mount and Advocate Capital
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KFA and Advocate is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding KFA Mount Lucas and Advocate Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advocate Capital Man and KFA Mount 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 KFA Mount Lucas are associated (or correlated) with Advocate Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advocate Capital Man has no effect on the direction of KFA Mount i.e., KFA Mount and Advocate Capital go up and down completely randomly.
Pair Corralation between KFA Mount and Advocate Capital
If you would invest 2,385 in Advocate Capital Management on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Advocate Capital Management or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 5.0% |
| Values | Daily Returns |
KFA Mount Lucas vs. Advocate Capital Management
Performance |
| Timeline |
| KFA Mount Lucas |
| Advocate Capital Man |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
KFA Mount and Advocate Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KFA Mount and Advocate Capital
The main advantage of trading using opposite KFA Mount and Advocate Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KFA Mount position performs unexpectedly, Advocate Capital 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 Advocate Capital will offset losses from the drop in Advocate Capital's long position.| KFA Mount vs. iMGP DBi Managed | KFA Mount vs. Simplify Exchange Traded | KFA Mount vs. Simplify Interest Rate | KFA Mount vs. AGFiQ Market Neutral |
| Advocate Capital vs. Simplify Interest Rate | Advocate Capital vs. KFA Mount Lucas | Advocate Capital vs. Simplify Exchange Traded | Advocate Capital vs. AGFiQ Market Neutral |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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