Correlation Between Arrow Managed and Saat Servative
Can any of the company-specific risk be diversified away by investing in both Arrow Managed and Saat Servative 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 Saat Servative 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 Saat Servative Strategy, you can compare the effects of market volatilities on Arrow Managed and Saat Servative 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 Saat Servative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Managed and Saat Servative.
Diversification Opportunities for Arrow Managed and Saat Servative
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Arrow and Saat is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Managed Futures and Saat Servative Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saat Servative Strategy 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 Saat Servative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saat Servative Strategy has no effect on the direction of Arrow Managed i.e., Arrow Managed and Saat Servative go up and down completely randomly.
Pair Corralation between Arrow Managed and Saat Servative
Assuming the 90 days horizon Arrow Managed Futures is expected to generate 10.52 times more return on investment than Saat Servative. However, Arrow Managed is 10.52 times more volatile than Saat Servative Strategy. It trades about 0.31 of its potential returns per unit of risk. Saat Servative Strategy is currently generating about 0.38 per unit of risk. If you would invest 543.00 in Arrow Managed Futures on September 13, 2024 and sell it today you would earn a total of 40.00 from holding Arrow Managed Futures or generate 7.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arrow Managed Futures vs. Saat Servative Strategy
Performance |
| Timeline |
| Arrow Managed Futures |
| Saat Servative Strategy |
Arrow Managed and Saat Servative Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Managed and Saat Servative
The main advantage of trading using opposite Arrow Managed and Saat Servative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Managed position performs unexpectedly, Saat Servative 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 Saat Servative will offset losses from the drop in Saat Servative's long position.| Arrow Managed vs. 1919 Financial Services | Arrow Managed vs. Davis Financial Fund | Arrow Managed vs. Vanguard Financials Index | Arrow Managed vs. Prudential Jennison Financial |
| Saat Servative vs. Short Duration Inflation | Saat Servative vs. Arrow Managed Futures | Saat Servative vs. Aqr Managed Futures | Saat Servative vs. Loomis Sayles Inflation |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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