Correlation Between Arrow Managed and Swan Defined
Can any of the company-specific risk be diversified away by investing in both Arrow Managed and Swan Defined 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 Swan Defined 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 Swan Defined Risk, you can compare the effects of market volatilities on Arrow Managed and Swan Defined 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 Swan Defined. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Managed and Swan Defined.
Diversification Opportunities for Arrow Managed and Swan Defined
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Arrow and Swan is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Managed Futures and Swan Defined Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swan Defined Risk 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 Swan Defined. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swan Defined Risk has no effect on the direction of Arrow Managed i.e., Arrow Managed and Swan Defined go up and down completely randomly.
Pair Corralation between Arrow Managed and Swan Defined
Assuming the 90 days horizon Arrow Managed Futures is expected to generate 2.08 times more return on investment than Swan Defined. However, Arrow Managed is 2.08 times more volatile than Swan Defined Risk. It trades about 0.08 of its potential returns per unit of risk. Swan Defined Risk is currently generating about -0.12 per unit of risk. If you would invest 544.00 in Arrow Managed Futures on August 31, 2024 and sell it today you would earn a total of 13.00 from holding Arrow Managed Futures or generate 2.39% 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. Swan Defined Risk
Performance |
| Timeline |
| Arrow Managed Futures |
| Swan Defined Risk |
Arrow Managed and Swan Defined Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Managed and Swan Defined
The main advantage of trading using opposite Arrow Managed and Swan Defined positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Managed position performs unexpectedly, Swan Defined 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 Swan Defined will offset losses from the drop in Swan Defined's long position.| Arrow Managed vs. Aqr Managed Futures | Arrow Managed vs. Pimco Trends Managed | Arrow Managed vs. Pimco Trends Managed | Arrow Managed vs. American Beacon Ahl |
| Swan Defined vs. Qs Large Cap | Swan Defined vs. Arrow Managed Futures | Swan Defined vs. Iaadx | Swan Defined vs. Volumetric Fund Volumetric |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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