Correlation Between Arrow Managed and Aquila Tax-free
Can any of the company-specific risk be diversified away by investing in both Arrow Managed and Aquila Tax-free 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 Aquila Tax-free 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 Aquila Tax Free Trust, you can compare the effects of market volatilities on Arrow Managed and Aquila Tax-free 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 Aquila Tax-free. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Managed and Aquila Tax-free.
Diversification Opportunities for Arrow Managed and Aquila Tax-free
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Arrow and Aquila is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Managed Futures and Aquila Tax Free Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquila Tax Free 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 Aquila Tax-free. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquila Tax Free has no effect on the direction of Arrow Managed i.e., Arrow Managed and Aquila Tax-free go up and down completely randomly.
Pair Corralation between Arrow Managed and Aquila Tax-free
Assuming the 90 days horizon Arrow Managed Futures is expected to generate 10.02 times more return on investment than Aquila Tax-free. However, Arrow Managed is 10.02 times more volatile than Aquila Tax Free Trust. It trades about 0.01 of its potential returns per unit of risk. Aquila Tax Free Trust is currently generating about 0.05 per unit of risk. If you would invest 552.00 in Arrow Managed Futures on August 29, 2024 and sell it today you would earn a total of 11.00 from holding Arrow Managed Futures or generate 1.99% 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. Aquila Tax Free Trust
Performance |
| Timeline |
| Arrow Managed Futures |
| Aquila Tax Free |
Arrow Managed and Aquila Tax-free Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Managed and Aquila Tax-free
The main advantage of trading using opposite Arrow Managed and Aquila Tax-free positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Managed position performs unexpectedly, Aquila Tax-free 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 Aquila Tax-free will offset losses from the drop in Aquila Tax-free's long position.| Arrow Managed vs. Arrow Dwa Balanced | Arrow Managed vs. Arrow Dwa Balanced | Arrow Managed vs. Arrow Dwa Balanced | Arrow Managed vs. Arrow Dwa Tactical |
| Aquila Tax-free vs. Hennessy Technology Fund | Aquila Tax-free vs. Columbia Global Technology | Aquila Tax-free vs. Fidelity Advisor Technology | Aquila Tax-free vs. Towpath Technology |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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