Correlation Between Small Cap and UNION
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By analyzing existing cross correlation between Small Cap Premium and UNION PAC P, you can compare the effects of market volatilities on Small Cap and UNION 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 Small Cap with a short position of UNION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and UNION.
Diversification Opportunities for Small Cap and UNION
Excellent diversification
The 3 months correlation between Small and UNION is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Premium and UNION PAC P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNION PAC P and Small Cap 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 Small Cap Premium are associated (or correlated) with UNION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNION PAC P has no effect on the direction of Small Cap i.e., Small Cap and UNION go up and down completely randomly.
Pair Corralation between Small Cap and UNION
Considering the 90-day investment horizon Small Cap Premium is expected to generate 1.36 times more return on investment than UNION. However, Small Cap is 1.36 times more volatile than UNION PAC P. It trades about 0.11 of its potential returns per unit of risk. UNION PAC P is currently generating about 0.0 per unit of risk. If you would invest 2,440 in Small Cap Premium on September 15, 2024 and sell it today you would earn a total of 20.00 from holding Small Cap Premium or generate 0.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Small Cap Premium vs. UNION PAC P
Performance |
| Timeline |
| Small Cap Premium |
| UNION PAC P |
Small Cap and UNION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Cap and UNION
The main advantage of trading using opposite Small Cap and UNION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Cap position performs unexpectedly, UNION 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 UNION will offset losses from the drop in UNION's long position.| Small Cap vs. RiverNorth Specialty Finance | Small Cap vs. Royce Micro Cap | Small Cap vs. First Trust Enhanced | Small Cap vs. Voya Global Advantage |
| UNION vs. Aldel Financial II | UNION vs. BOS Better Online | UNION vs. Alvarium Tiedemann Holdings | UNION vs. Small Cap Premium |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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