Correlation Between Arrow Managed and High Yield
Can any of the company-specific risk be diversified away by investing in both Arrow Managed and High Yield 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 High Yield 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 High Yield Fund, you can compare the effects of market volatilities on Arrow Managed and High Yield 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 High Yield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Managed and High Yield.
Diversification Opportunities for Arrow Managed and High Yield
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Arrow and High is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Managed Futures and High Yield Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Yield 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 High Yield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Yield Fund has no effect on the direction of Arrow Managed i.e., Arrow Managed and High Yield go up and down completely randomly.
Pair Corralation between Arrow Managed and High Yield
Assuming the 90 days horizon Arrow Managed Futures is expected to generate 8.86 times more return on investment than High Yield. However, Arrow Managed is 8.86 times more volatile than High Yield Fund. It trades about 0.21 of its potential returns per unit of risk. High Yield Fund is currently generating about 0.22 per unit of risk. If you would invest 546.00 in Arrow Managed Futures on September 14, 2024 and sell it today you would earn a total of 29.00 from holding Arrow Managed Futures or generate 5.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arrow Managed Futures vs. High Yield Fund
Performance |
| Timeline |
| Arrow Managed Futures |
| High Yield Fund |
Arrow Managed and High Yield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Managed and High Yield
The main advantage of trading using opposite Arrow Managed and High Yield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Managed position performs unexpectedly, High Yield 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 High Yield will offset losses from the drop in High Yield's long position.| Arrow Managed vs. Money Market Obligations | Arrow Managed vs. Elfun Government Money | Arrow Managed vs. Hewitt Money Market | Arrow Managed vs. Putnam Money Market |
| High Yield vs. Global Fixed Income | High Yield vs. Global Fixed Income | High Yield vs. Global Fixed Income | High Yield vs. Global E Portfolio |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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