Correlation Between Strategic Bond and Ancorathelen Small

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Can any of the company-specific risk be diversified away by investing in both Strategic Bond and Ancorathelen Small 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 Strategic Bond and Ancorathelen Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Bond Fund and Ancorathelen Small Mid Cap, you can compare the effects of market volatilities on Strategic Bond and Ancorathelen Small 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 Strategic Bond with a short position of Ancorathelen Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Bond and Ancorathelen Small.

Diversification Opportunities for Strategic Bond and Ancorathelen Small

-0.59
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Strategic and Ancorathelen is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Bond Fund and Ancorathelen Small Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ancorathelen Small Mid and Strategic Bond 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 Strategic Bond Fund are associated (or correlated) with Ancorathelen Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ancorathelen Small Mid has no effect on the direction of Strategic Bond i.e., Strategic Bond and Ancorathelen Small go up and down completely randomly.

Pair Corralation between Strategic Bond and Ancorathelen Small

Assuming the 90 days horizon Strategic Bond is expected to generate 3.95 times less return on investment than Ancorathelen Small. But when comparing it to its historical volatility, Strategic Bond Fund is 2.65 times less risky than Ancorathelen Small. It trades about 0.06 of its potential returns per unit of risk. Ancorathelen Small Mid Cap is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,615  in Ancorathelen Small Mid Cap on September 12, 2024 and sell it today you would earn a total of  601.00  from holding Ancorathelen Small Mid Cap or generate 37.21% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Strategic Bond Fund  vs.  Ancorathelen Small Mid Cap

 Performance 
       Timeline  
Strategic Bond 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Strategic Bond Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Strategic Bond is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Ancorathelen Small Mid 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Ancorathelen Small Mid Cap are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Ancorathelen Small may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Strategic Bond and Ancorathelen Small Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Strategic Bond and Ancorathelen Small

The main advantage of trading using opposite Strategic Bond and Ancorathelen Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Bond position performs unexpectedly, Ancorathelen Small 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 Ancorathelen Small will offset losses from the drop in Ancorathelen Small's long position.
The idea behind Strategic Bond Fund and Ancorathelen Small Mid Cap pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.

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