Correlation Between Arrow Managed and Amana Participation
Can any of the company-specific risk be diversified away by investing in both Arrow Managed and Amana Participation 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 Arrow Managed and Amana Participation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow Managed Futures and Amana Participation Fund, you can compare the effects of market volatilities on Arrow Managed and Amana Participation 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 Arrow Managed with a short position of Amana Participation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Managed and Amana Participation.
Diversification Opportunities for Arrow Managed and Amana Participation
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Arrow and Amana is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Managed Futures and Amana Participation Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amana Participation and Arrow 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 Arrow Managed Futures are associated (or correlated) with Amana Participation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amana Participation has no effect on the direction of Arrow Managed i.e., Arrow Managed and Amana Participation go up and down completely randomly.
Pair Corralation between Arrow Managed and Amana Participation
Assuming the 90 days horizon Arrow Managed Futures is expected to generate 15.04 times more return on investment than Amana Participation. However, Arrow Managed is 15.04 times more volatile than Amana Participation Fund. It trades about 0.31 of its potential returns per unit of risk. Amana Participation Fund is currently generating about 0.2 per unit of risk. If you would invest 543.00 in Arrow Managed Futures on September 13, 2024 and sell it today you would earn a total of 40.00 from holding Arrow Managed Futures or generate 7.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arrow Managed Futures vs. Amana Participation Fund
Performance |
| Timeline |
| Arrow Managed Futures |
| Amana Participation |
Arrow Managed and Amana Participation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Managed and Amana Participation
The main advantage of trading using opposite Arrow Managed and Amana Participation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Managed position performs unexpectedly, Amana Participation 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 Amana Participation will offset losses from the drop in Amana Participation's long position.| Arrow Managed vs. 1919 Financial Services | Arrow Managed vs. Davis Financial Fund | Arrow Managed vs. Vanguard Financials Index | Arrow Managed vs. Prudential Jennison Financial |
| Amana Participation vs. Red Oak Technology | Amana Participation vs. Arrow Managed Futures | Amana Participation vs. Materials Portfolio Fidelity | Amana Participation vs. Scharf Global Opportunity |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Stocks Directory Find actively traded stocks across global markets | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |