Correlation Between Arrow Managed and Frost Credit
Can any of the company-specific risk be diversified away by investing in both Arrow Managed and Frost Credit 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 Frost Credit 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 Frost Credit Fund, you can compare the effects of market volatilities on Arrow Managed and Frost Credit 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 Frost Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Managed and Frost Credit.
Diversification Opportunities for Arrow Managed and Frost Credit
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Arrow and Frost is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Managed Futures and Frost Credit Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frost Credit 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 Frost Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frost Credit has no effect on the direction of Arrow Managed i.e., Arrow Managed and Frost Credit go up and down completely randomly.
Pair Corralation between Arrow Managed and Frost Credit
Assuming the 90 days horizon Arrow Managed is expected to generate 1.27 times less return on investment than Frost Credit. In addition to that, Arrow Managed is 8.29 times more volatile than Frost Credit Fund. It trades about 0.02 of its total potential returns per unit of risk. Frost Credit Fund is currently generating about 0.24 per unit of volatility. If you would invest 862.00 in Frost Credit Fund on September 4, 2024 and sell it today you would earn a total of 88.00 from holding Frost Credit Fund or generate 10.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arrow Managed Futures vs. Frost Credit Fund
Performance |
| Timeline |
| Arrow Managed Futures |
| Frost Credit |
Arrow Managed and Frost Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Managed and Frost Credit
The main advantage of trading using opposite Arrow Managed and Frost Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Managed position performs unexpectedly, Frost Credit 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 Frost Credit will offset losses from the drop in Frost Credit's long position.| Arrow Managed vs. Growth Strategy Fund | Arrow Managed vs. Artisan Thematic Fund | Arrow Managed vs. Nationwide Global Equity | Arrow Managed vs. Volumetric Fund Volumetric |
| Frost Credit vs. American Funds Inflation | Frost Credit vs. Ab Bond Inflation | Frost Credit vs. Arrow Managed Futures | Frost Credit vs. Aqr Managed Futures |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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