Correlation Between Palmer Square and Acrex
Can any of the company-specific risk be diversified away by investing in both Palmer Square and Acrex 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 Palmer Square and Acrex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Palmer Square Ultra Short and Acrex, you can compare the effects of market volatilities on Palmer Square and Acrex 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 Palmer Square with a short position of Acrex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Palmer Square and Acrex.
Diversification Opportunities for Palmer Square and Acrex
-0.93 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Palmer and Acrex is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Palmer Square Ultra Short and Acrex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acrex and Palmer Square 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 Palmer Square Ultra Short are associated (or correlated) with Acrex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acrex has no effect on the direction of Palmer Square i.e., Palmer Square and Acrex go up and down completely randomly.
Pair Corralation between Palmer Square and Acrex
Assuming the 90 days horizon Palmer Square Ultra Short is expected to generate 0.18 times more return on investment than Acrex. However, Palmer Square Ultra Short is 5.67 times less risky than Acrex. It trades about -0.16 of its potential returns per unit of risk. Acrex is currently generating about -0.29 per unit of risk. If you would invest 2,005 in Palmer Square Ultra Short on September 28, 2024 and sell it today you would lose (19.00) from holding Palmer Square Ultra Short or give up 0.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Palmer Square Ultra Short vs. Acrex
Performance |
| Timeline |
| Palmer Square Ultra |
| Acrex |
Palmer Square and Acrex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Palmer Square and Acrex
The main advantage of trading using opposite Palmer Square and Acrex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Palmer Square position performs unexpectedly, Acrex 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 Acrex will offset losses from the drop in Acrex's long position.| Palmer Square vs. Palmer Square Ssi | Palmer Square vs. Short Term Income Fund | Palmer Square vs. Palmer Square Income | Palmer Square vs. Acm Dynamic Opportunity |
| Acrex vs. Lord Abbett Small | Acrex vs. Fidelity Small Cap | Acrex vs. Applied Finance Explorer | Acrex vs. Heartland Value Plus |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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