Correlation Between NBI Unconstrained and Accelerate Arbitrage
Can any of the company-specific risk be diversified away by investing in both NBI Unconstrained and Accelerate Arbitrage 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 NBI Unconstrained and Accelerate Arbitrage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NBI Unconstrained Fixed and Accelerate Arbitrage, you can compare the effects of market volatilities on NBI Unconstrained and Accelerate Arbitrage 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 NBI Unconstrained with a short position of Accelerate Arbitrage. Check out your portfolio center. Please also check ongoing floating volatility patterns of NBI Unconstrained and Accelerate Arbitrage.
Diversification Opportunities for NBI Unconstrained and Accelerate Arbitrage
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NBI and Accelerate is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding NBI Unconstrained Fixed and Accelerate Arbitrage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accelerate Arbitrage and NBI Unconstrained 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 NBI Unconstrained Fixed are associated (or correlated) with Accelerate Arbitrage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accelerate Arbitrage has no effect on the direction of NBI Unconstrained i.e., NBI Unconstrained and Accelerate Arbitrage go up and down completely randomly.
Pair Corralation between NBI Unconstrained and Accelerate Arbitrage
Assuming the 90 days trading horizon NBI Unconstrained is expected to generate 2.47 times less return on investment than Accelerate Arbitrage. But when comparing it to its historical volatility, NBI Unconstrained Fixed is 4.62 times less risky than Accelerate Arbitrage. It trades about 0.04 of its potential returns per unit of risk. Accelerate Arbitrage is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,372 in Accelerate Arbitrage on September 1, 2024 and sell it today you would earn a total of 253.00 from holding Accelerate Arbitrage or generate 10.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.32% |
| Values | Daily Returns |
NBI Unconstrained Fixed vs. Accelerate Arbitrage
Performance |
| Timeline |
| NBI Unconstrained Fixed |
| Accelerate Arbitrage |
NBI Unconstrained and Accelerate Arbitrage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NBI Unconstrained and Accelerate Arbitrage
The main advantage of trading using opposite NBI Unconstrained and Accelerate Arbitrage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NBI Unconstrained position performs unexpectedly, Accelerate Arbitrage 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 Accelerate Arbitrage will offset losses from the drop in Accelerate Arbitrage's long position.| NBI Unconstrained vs. NBI High Yield | NBI Unconstrained vs. NBI Active Canadian | NBI Unconstrained vs. Picton Mahoney Fortified | NBI Unconstrained vs. NBI Liquid Alternatives |
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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