Correlation Between Red Oak and Al Frank
Can any of the company-specific risk be diversified away by investing in both Red Oak and Al Frank 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 Al Frank 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 Al Frank Fund, you can compare the effects of market volatilities on Red Oak and Al Frank 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 Al Frank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Oak and Al Frank.
Diversification Opportunities for Red Oak and Al Frank
Significant diversification
The 3 months correlation between Red and VALAX is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Red Oak Technology and Al Frank Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Al Frank Fund 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 Al Frank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Al Frank Fund has no effect on the direction of Red Oak i.e., Red Oak and Al Frank go up and down completely randomly.
Pair Corralation between Red Oak and Al Frank
Assuming the 90 days horizon Red Oak Technology is expected to generate 1.26 times more return on investment than Al Frank. However, Red Oak is 1.26 times more volatile than Al Frank Fund. It trades about 0.1 of its potential returns per unit of risk. Al Frank Fund is currently generating about 0.04 per unit of risk. If you would invest 3,732 in Red Oak Technology on September 15, 2024 and sell it today you would earn a total of 1,301 from holding Red Oak Technology or generate 34.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Red Oak Technology vs. Al Frank Fund
Performance |
| Timeline |
| Red Oak Technology |
| Al Frank Fund |
Red Oak and Al Frank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Red Oak and Al Frank
The main advantage of trading using opposite Red Oak and Al Frank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Oak position performs unexpectedly, Al Frank 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 Al Frank will offset losses from the drop in Al Frank's 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 |
| Al Frank vs. Columbia Global Technology | Al Frank vs. Hennessy Technology Fund | Al Frank vs. Icon Information Technology | Al Frank vs. Red Oak Technology |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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