Correlation Between Arrow Managed and Amg River
Can any of the company-specific risk be diversified away by investing in both Arrow Managed and Amg River 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 Amg River 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 Amg River Road, you can compare the effects of market volatilities on Arrow Managed and Amg River 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 Amg River. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Managed and Amg River.
Diversification Opportunities for Arrow Managed and Amg River
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Arrow and Amg is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Managed Futures and Amg River Road in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg River Road 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 Amg River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg River Road has no effect on the direction of Arrow Managed i.e., Arrow Managed and Amg River go up and down completely randomly.
Pair Corralation between Arrow Managed and Amg River
Assuming the 90 days horizon Arrow Managed is expected to generate 8.07 times less return on investment than Amg River. In addition to that, Arrow Managed is 1.7 times more volatile than Amg River Road. It trades about 0.02 of its total potential returns per unit of risk. Amg River Road is currently generating about 0.31 per unit of volatility. If you would invest 612.00 in Amg River Road on October 24, 2024 and sell it today you would earn a total of 23.00 from holding Amg River Road or generate 3.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arrow Managed Futures vs. Amg River Road
Performance |
| Timeline |
| Arrow Managed Futures |
| Amg River Road |
Arrow Managed and Amg River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Managed and Amg River
The main advantage of trading using opposite Arrow Managed and Amg River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Managed position performs unexpectedly, Amg River 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 Amg River will offset losses from the drop in Amg River's long position.| Arrow Managed vs. Leader Short Term Bond | Arrow Managed vs. Nuveen Strategic Municipal | Arrow Managed vs. Ambrus Core Bond | Arrow Managed vs. Artisan High Income |
| Amg River vs. Hunter Small Cap | Amg River vs. Touchstone Small Cap | Amg River vs. Needham Small Cap | Amg River vs. Praxis Small Cap |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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