Correlation Between Red Oak and Altegris Futures
Can any of the company-specific risk be diversified away by investing in both Red Oak and Altegris Futures 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 Red Oak and Altegris Futures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Red Oak Technology and Altegris Futures Evolution, you can compare the effects of market volatilities on Red Oak and Altegris Futures 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 Red Oak with a short position of Altegris Futures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Oak and Altegris Futures.
Diversification Opportunities for Red Oak and Altegris Futures
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Red and Altegris is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Red Oak Technology and Altegris Futures Evolution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altegris Futures Evo and Red Oak 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 Red Oak Technology are associated (or correlated) with Altegris Futures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altegris Futures Evo has no effect on the direction of Red Oak i.e., Red Oak and Altegris Futures go up and down completely randomly.
Pair Corralation between Red Oak and Altegris Futures
Assuming the 90 days horizon Red Oak Technology is expected to generate 1.96 times more return on investment than Altegris Futures. However, Red Oak is 1.96 times more volatile than Altegris Futures Evolution. It trades about 0.18 of its potential returns per unit of risk. Altegris Futures Evolution is currently generating about -0.03 per unit of risk. If you would invest 4,756 in Red Oak Technology on September 5, 2024 and sell it today you would earn a total of 201.00 from holding Red Oak Technology or generate 4.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Red Oak Technology vs. Altegris Futures Evolution
Performance |
| Timeline |
| Red Oak Technology |
| Altegris Futures Evo |
Red Oak and Altegris Futures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Red Oak and Altegris Futures
The main advantage of trading using opposite Red Oak and Altegris Futures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Oak position performs unexpectedly, Altegris Futures 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 Altegris Futures will offset losses from the drop in Altegris Futures' long position.| Red Oak vs. Pin Oak Equity | Red Oak vs. White Oak Select | Red Oak vs. Black Oak Emerging | Red Oak vs. Berkshire Focus |
| Altegris Futures vs. Altegrisaaca Opportunistic Real | Altegris Futures vs. Altegris Futures Evolution | Altegris Futures vs. Altegris Futures Evolution | Altegris Futures vs. American Mutual Fund |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |