Correlation Between College Retirement and Locorr Market
Can any of the company-specific risk be diversified away by investing in both College Retirement and Locorr Market 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 College Retirement and Locorr Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between College Retirement Equities and Locorr Market Trend, you can compare the effects of market volatilities on College Retirement and Locorr Market 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 College Retirement with a short position of Locorr Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of College Retirement and Locorr Market.
Diversification Opportunities for College Retirement and Locorr Market
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between College and Locorr is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding College Retirement Equities and Locorr Market Trend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Locorr Market Trend and College Retirement 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 College Retirement Equities are associated (or correlated) with Locorr Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Locorr Market Trend has no effect on the direction of College Retirement i.e., College Retirement and Locorr Market go up and down completely randomly.
Pair Corralation between College Retirement and Locorr Market
Assuming the 90 days trading horizon College Retirement is expected to generate 2.8 times less return on investment than Locorr Market. In addition to that, College Retirement is 1.16 times more volatile than Locorr Market Trend. It trades about 0.03 of its total potential returns per unit of risk. Locorr Market Trend is currently generating about 0.1 per unit of volatility. If you would invest 1,006 in Locorr Market Trend on October 22, 2024 and sell it today you would earn a total of 38.00 from holding Locorr Market Trend or generate 3.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
College Retirement Equities vs. Locorr Market Trend
Performance |
| Timeline |
| College Retirement |
| Locorr Market Trend |
College Retirement and Locorr Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with College Retirement and Locorr Market
The main advantage of trading using opposite College Retirement and Locorr Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if College Retirement position performs unexpectedly, Locorr Market 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 Locorr Market will offset losses from the drop in Locorr Market's long position.| College Retirement vs. Franklin Lifesmart Retirement | College Retirement vs. Wilmington Trust Retirement | College Retirement vs. Columbia Moderate Growth | College Retirement vs. Voya Target Retirement |
| Locorr Market vs. Moderate Balanced Allocation | Locorr Market vs. Wealthbuilder Moderate Balanced | Locorr Market vs. Voya Target Retirement | Locorr Market vs. College Retirement Equities |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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