Correlation Between Alternative Credit and Bts Managed
Can any of the company-specific risk be diversified away by investing in both Alternative Credit and Bts 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 Alternative Credit and Bts Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alternative Credit Income and Bts Managed Income, you can compare the effects of market volatilities on Alternative Credit and Bts 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 Alternative Credit with a short position of Bts Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alternative Credit and Bts Managed.
Diversification Opportunities for Alternative Credit and Bts Managed
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alternative and Bts is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Alternative Credit Income and Bts Managed Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bts Managed Income and Alternative Credit 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 Alternative Credit Income are associated (or correlated) with Bts Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bts Managed Income has no effect on the direction of Alternative Credit i.e., Alternative Credit and Bts Managed go up and down completely randomly.
Pair Corralation between Alternative Credit and Bts Managed
Assuming the 90 days horizon Alternative Credit is expected to generate 2.05 times less return on investment than Bts Managed. In addition to that, Alternative Credit is 1.19 times more volatile than Bts Managed Income. It trades about 0.06 of its total potential returns per unit of risk. Bts Managed Income is currently generating about 0.15 per unit of volatility. If you would invest 892.00 in Bts Managed Income on August 26, 2024 and sell it today you would earn a total of 86.00 from holding Bts Managed Income or generate 9.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alternative Credit Income vs. Bts Managed Income
Performance |
| Timeline |
| Alternative Credit Income |
| Bts Managed Income |
Alternative Credit and Bts Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alternative Credit and Bts Managed
The main advantage of trading using opposite Alternative Credit and Bts Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alternative Credit position performs unexpectedly, Bts 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 Bts Managed will offset losses from the drop in Bts Managed's long position.| Alternative Credit vs. Prudential Real Estate | Alternative Credit vs. Simt Real Estate | Alternative Credit vs. Tiaa Cref Real Estate | Alternative Credit vs. Forum Real Estate |
| Bts Managed vs. Vanguard Equity Income | Bts Managed vs. Vanguard Wellington Fund | Bts Managed vs. Alternative Credit Income | Bts Managed vs. Vanguard Materials Index |
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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