Correlation Between RTW Venture and BH Macro
Can any of the company-specific risk be diversified away by investing in both RTW Venture and BH Macro 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 RTW Venture and BH Macro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RTW Venture Fund and BH Macro Limited, you can compare the effects of market volatilities on RTW Venture and BH Macro 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 RTW Venture with a short position of BH Macro. Check out your portfolio center. Please also check ongoing floating volatility patterns of RTW Venture and BH Macro.
Diversification Opportunities for RTW Venture and BH Macro
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between RTW and BHMG is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding RTW Venture Fund and BH Macro Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BH Macro Limited and RTW Venture 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 RTW Venture Fund are associated (or correlated) with BH Macro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BH Macro Limited has no effect on the direction of RTW Venture i.e., RTW Venture and BH Macro go up and down completely randomly.
Pair Corralation between RTW Venture and BH Macro
Assuming the 90 days trading horizon RTW Venture Fund is expected to generate 1.5 times more return on investment than BH Macro. However, RTW Venture is 1.5 times more volatile than BH Macro Limited. It trades about 0.07 of its potential returns per unit of risk. BH Macro Limited is currently generating about 0.03 per unit of risk. If you would invest 115.00 in RTW Venture Fund on August 26, 2024 and sell it today you would earn a total of 33.00 from holding RTW Venture Fund or generate 28.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RTW Venture Fund vs. BH Macro Limited
Performance |
| Timeline |
| RTW Venture Fund |
| BH Macro Limited |
RTW Venture and BH Macro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RTW Venture and BH Macro
The main advantage of trading using opposite RTW Venture and BH Macro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RTW Venture position performs unexpectedly, BH Macro 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 BH Macro will offset losses from the drop in BH Macro's long position.| RTW Venture vs. Uniper SE | RTW Venture vs. Mulberry Group PLC | RTW Venture vs. London Security Plc | RTW Venture vs. Triad Group PLC |
| BH Macro vs. Catalyst Media Group | BH Macro vs. Oncimmune Holdings plc | BH Macro vs. Invesco Health Care | BH Macro vs. Coor Service Management |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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