Correlation Between Arrow Managed and New Economy
Can any of the company-specific risk be diversified away by investing in both Arrow Managed and New Economy 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 New Economy 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 New Economy Fund, you can compare the effects of market volatilities on Arrow Managed and New Economy 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 New Economy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Managed and New Economy.
Diversification Opportunities for Arrow Managed and New Economy
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Arrow and New is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Managed Futures and New Economy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Economy Fund 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 New Economy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Economy Fund has no effect on the direction of Arrow Managed i.e., Arrow Managed and New Economy go up and down completely randomly.
Pair Corralation between Arrow Managed and New Economy
Assuming the 90 days horizon Arrow Managed Futures is expected to generate 1.2 times more return on investment than New Economy. However, Arrow Managed is 1.2 times more volatile than New Economy Fund. It trades about 0.11 of its potential returns per unit of risk. New Economy Fund is currently generating about 0.09 per unit of risk. If you would invest 569.00 in Arrow Managed Futures on October 22, 2024 and sell it today you would earn a total of 12.00 from holding Arrow Managed Futures or generate 2.11% 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. New Economy Fund
Performance |
| Timeline |
| Arrow Managed Futures |
| New Economy Fund |
Arrow Managed and New Economy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Managed and New Economy
The main advantage of trading using opposite Arrow Managed and New Economy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Managed position performs unexpectedly, New Economy 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 New Economy will offset losses from the drop in New Economy's long position.| Arrow Managed vs. Artisan Developing World | Arrow Managed vs. Kinetics Market Opportunities | Arrow Managed vs. Bbh Trust | Arrow Managed vs. Aqr Sustainable Long Short |
| New Economy vs. Lord Abbett Inflation | New Economy vs. Arrow Managed Futures | New Economy vs. Aqr Managed Futures | New Economy vs. Guggenheim 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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