Correlation Between Arrow Managed and Black Oak
Can any of the company-specific risk be diversified away by investing in both Arrow Managed and Black Oak 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 Black Oak 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 Black Oak Emerging, you can compare the effects of market volatilities on Arrow Managed and Black Oak 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 Black Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Managed and Black Oak.
Diversification Opportunities for Arrow Managed and Black Oak
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Arrow and Black is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Managed Futures and Black Oak Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Oak Emerging 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 Black Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Oak Emerging has no effect on the direction of Arrow Managed i.e., Arrow Managed and Black Oak go up and down completely randomly.
Pair Corralation between Arrow Managed and Black Oak
Assuming the 90 days horizon Arrow Managed Futures is expected to generate 0.94 times more return on investment than Black Oak. However, Arrow Managed Futures is 1.06 times less risky than Black Oak. It trades about 0.25 of its potential returns per unit of risk. Black Oak Emerging is currently generating about 0.13 per unit of risk. If you would invest 525.00 in Arrow Managed Futures on September 1, 2024 and sell it today you would earn a total of 33.00 from holding Arrow Managed Futures or generate 6.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arrow Managed Futures vs. Black Oak Emerging
Performance |
| Timeline |
| Arrow Managed Futures |
| Black Oak Emerging |
Arrow Managed and Black Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Managed and Black Oak
The main advantage of trading using opposite Arrow Managed and Black Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Managed position performs unexpectedly, Black Oak 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 Black Oak will offset losses from the drop in Black Oak's long position.| Arrow Managed vs. Arrow Dwa Tactical | Arrow Managed vs. Arrow Dwa Tactical | Arrow Managed vs. Vanguard 500 Index | Arrow Managed vs. Allspring Global Dividend |
| Black Oak vs. Red Oak Technology | Black Oak vs. Pin Oak Equity | Black Oak vs. White Oak Select | Black Oak vs. Live Oak Health |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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