Correlation Between Arrow Managed and Capital Growth
Can any of the company-specific risk be diversified away by investing in both Arrow Managed and Capital Growth 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 Capital Growth 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 Capital Growth Fund, you can compare the effects of market volatilities on Arrow Managed and Capital Growth 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 Capital Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Managed and Capital Growth.
Diversification Opportunities for Arrow Managed and Capital Growth
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Arrow and Capital is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Managed Futures and Capital Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Growth 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 Capital Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Growth has no effect on the direction of Arrow Managed i.e., Arrow Managed and Capital Growth go up and down completely randomly.
Pair Corralation between Arrow Managed and Capital Growth
Assuming the 90 days horizon Arrow Managed Futures is expected to under-perform the Capital Growth. In addition to that, Arrow Managed is 1.74 times more volatile than Capital Growth Fund. It trades about -0.05 of its total potential returns per unit of risk. Capital Growth Fund is currently generating about 0.09 per unit of volatility. If you would invest 1,338 in Capital Growth Fund on September 3, 2024 and sell it today you would earn a total of 146.00 from holding Capital Growth Fund or generate 10.91% 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. Capital Growth Fund
Performance |
| Timeline |
| Arrow Managed Futures |
| Capital Growth |
Arrow Managed and Capital Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Managed and Capital Growth
The main advantage of trading using opposite Arrow Managed and Capital Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Managed position performs unexpectedly, Capital Growth 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 Capital Growth will offset losses from the drop in Capital Growth's long position.| Arrow Managed vs. Transamerica Funds | Arrow Managed vs. T Rowe Price | Arrow Managed vs. Cs 607 Tax | Arrow Managed vs. Intermediate Term Tax Free Bond |
| Capital Growth vs. Cref Inflation Linked Bond | Capital Growth vs. Arrow Managed Futures | Capital Growth vs. Asg Managed Futures | Capital Growth vs. Ab Bond 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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