Correlation Between Arrow Managed and Ep Emerging
Can any of the company-specific risk be diversified away by investing in both Arrow Managed and Ep Emerging 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 Ep Emerging 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 Ep Emerging Markets, you can compare the effects of market volatilities on Arrow Managed and Ep Emerging 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 Ep Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Managed and Ep Emerging.
Diversification Opportunities for Arrow Managed and Ep Emerging
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Arrow and EPEIX is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Managed Futures and Ep Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ep Emerging Markets 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 Ep Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ep Emerging Markets has no effect on the direction of Arrow Managed i.e., Arrow Managed and Ep Emerging go up and down completely randomly.
Pair Corralation between Arrow Managed and Ep Emerging
Assuming the 90 days horizon Arrow Managed Futures is expected to generate 1.8 times more return on investment than Ep Emerging. However, Arrow Managed is 1.8 times more volatile than Ep Emerging Markets. It trades about 0.06 of its potential returns per unit of risk. Ep Emerging Markets is currently generating about -0.28 per unit of risk. If you would invest 553.00 in Arrow Managed Futures on August 29, 2024 and sell it today you would earn a total of 10.00 from holding Arrow Managed Futures or generate 1.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arrow Managed Futures vs. Ep Emerging Markets
Performance |
| Timeline |
| Arrow Managed Futures |
| Ep Emerging Markets |
Arrow Managed and Ep Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Managed and Ep Emerging
The main advantage of trading using opposite Arrow Managed and Ep Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Managed position performs unexpectedly, Ep Emerging 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 Ep Emerging will offset losses from the drop in Ep Emerging's long position.| Arrow Managed vs. Pimco Trends Managed | Arrow Managed vs. Pimco Trends Managed | Arrow Managed vs. HUMANA INC | Arrow Managed vs. Aquagold International |
| Ep Emerging vs. Vanguard Emerging Markets | Ep Emerging vs. Vanguard Emerging Markets | Ep Emerging vs. HUMANA INC | Ep Emerging vs. Aquagold International |
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.
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