Correlation Between Nebraska Municipal and Arrow Managed
Can any of the company-specific risk be diversified away by investing in both Nebraska Municipal and Arrow Managed 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 Nebraska Municipal and Arrow Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nebraska Municipal Fund and Arrow Managed Futures, you can compare the effects of market volatilities on Nebraska Municipal and Arrow Managed 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 Nebraska Municipal with a short position of Arrow Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nebraska Municipal and Arrow Managed.
Diversification Opportunities for Nebraska Municipal and Arrow Managed
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nebraska and Arrow is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Nebraska Municipal Fund and Arrow Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Managed Futures and Nebraska Municipal 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 Nebraska Municipal Fund are associated (or correlated) with Arrow Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Managed Futures has no effect on the direction of Nebraska Municipal i.e., Nebraska Municipal and Arrow Managed go up and down completely randomly.
Pair Corralation between Nebraska Municipal and Arrow Managed
Assuming the 90 days horizon Nebraska Municipal Fund is expected to generate 0.13 times more return on investment than Arrow Managed. However, Nebraska Municipal Fund is 7.97 times less risky than Arrow Managed. It trades about 0.12 of its potential returns per unit of risk. Arrow Managed Futures is currently generating about -0.02 per unit of risk. If you would invest 920.00 in Nebraska Municipal Fund on November 28, 2024 and sell it today you would earn a total of 6.00 from holding Nebraska Municipal Fund or generate 0.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nebraska Municipal Fund vs. Arrow Managed Futures
Performance |
| Timeline |
| Nebraska Municipal |
| Arrow Managed Futures |
Nebraska Municipal and Arrow Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nebraska Municipal and Arrow Managed
The main advantage of trading using opposite Nebraska Municipal and Arrow Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nebraska Municipal position performs unexpectedly, Arrow Managed 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 Arrow Managed will offset losses from the drop in Arrow Managed's long position.| Nebraska Municipal vs. M Large Cap | Nebraska Municipal vs. Guidemark Large Cap | Nebraska Municipal vs. Blackrock Large Cap | Nebraska Municipal vs. Fisher Large Cap |
| Arrow Managed vs. Us Government Securities | Arrow Managed vs. Inverse Government Long | Arrow Managed vs. John Hancock Government | Arrow Managed vs. Us Government Securities |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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