Correlation Between Pro Blend and Pro Blend
Can any of the company-specific risk be diversified away by investing in both Pro Blend and Pro Blend 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 Pro Blend and Pro Blend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pro Blend Extended Term and Pro Blend Maximum Term, you can compare the effects of market volatilities on Pro Blend and Pro Blend 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 Pro Blend with a short position of Pro Blend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pro Blend and Pro Blend.
Diversification Opportunities for Pro Blend and Pro Blend
Very weak diversification
The 3 months correlation between Pro and Pro is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Pro Blend Extended Term and Pro Blend Maximum Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pro Blend Maximum and Pro Blend 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 Pro Blend Extended Term are associated (or correlated) with Pro Blend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pro Blend Maximum has no effect on the direction of Pro Blend i.e., Pro Blend and Pro Blend go up and down completely randomly.
Pair Corralation between Pro Blend and Pro Blend
Assuming the 90 days horizon Pro Blend Extended Term is expected to generate 0.8 times more return on investment than Pro Blend. However, Pro Blend Extended Term is 1.26 times less risky than Pro Blend. It trades about 0.1 of its potential returns per unit of risk. Pro Blend Maximum Term is currently generating about 0.05 per unit of risk. If you would invest 2,049 in Pro Blend Extended Term on September 12, 2024 and sell it today you would earn a total of 19.00 from holding Pro Blend Extended Term or generate 0.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Pro Blend Extended Term vs. Pro Blend Maximum Term
Performance |
| Timeline |
| Pro Blend Extended |
| Pro Blend Maximum |
Pro Blend and Pro Blend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pro Blend and Pro Blend
The main advantage of trading using opposite Pro Blend and Pro Blend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pro Blend position performs unexpectedly, Pro Blend 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 Pro Blend will offset losses from the drop in Pro Blend's long position.| Pro Blend vs. Strategic Allocation Servative | Pro Blend vs. Strategic Allocation Aggressive | Pro Blend vs. Value Fund Investor | Pro Blend vs. International Growth Fund |
| Pro Blend vs. Franklin Lifesmart Retirement | Pro Blend vs. Dimensional Retirement Income | Pro Blend vs. College Retirement Equities | Pro Blend vs. Calvert Moderate Allocation |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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