Correlation Between Redwood Systematic and Frost Low
Can any of the company-specific risk be diversified away by investing in both Redwood Systematic and Frost Low 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 Redwood Systematic and Frost Low into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Redwood Systematic Macro and Frost Low Duration, you can compare the effects of market volatilities on Redwood Systematic and Frost Low 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 Redwood Systematic with a short position of Frost Low. Check out your portfolio center. Please also check ongoing floating volatility patterns of Redwood Systematic and Frost Low.
Diversification Opportunities for Redwood Systematic and Frost Low
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Redwood and Frost is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Redwood Systematic Macro and Frost Low Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frost Low Duration and Redwood Systematic 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 Redwood Systematic Macro are associated (or correlated) with Frost Low. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frost Low Duration has no effect on the direction of Redwood Systematic i.e., Redwood Systematic and Frost Low go up and down completely randomly.
Pair Corralation between Redwood Systematic and Frost Low
Assuming the 90 days horizon Redwood Systematic Macro is expected to generate 5.96 times more return on investment than Frost Low. However, Redwood Systematic is 5.96 times more volatile than Frost Low Duration. It trades about 0.32 of its potential returns per unit of risk. Frost Low Duration is currently generating about 0.03 per unit of risk. If you would invest 1,871 in Redwood Systematic Macro on September 1, 2024 and sell it today you would earn a total of 115.00 from holding Redwood Systematic Macro or generate 6.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Redwood Systematic Macro vs. Frost Low Duration
Performance |
| Timeline |
| Redwood Systematic Macro |
| Frost Low Duration |
Redwood Systematic and Frost Low Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Redwood Systematic and Frost Low
The main advantage of trading using opposite Redwood Systematic and Frost Low positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Redwood Systematic position performs unexpectedly, Frost Low 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 Frost Low will offset losses from the drop in Frost Low's long position.| Redwood Systematic vs. Redwood Managed Volatility | Redwood Systematic vs. Redwood Managed Volatility | Redwood Systematic vs. Redwood Managed Volatility | Redwood Systematic vs. Redwood Alphafactor Tactical |
| Frost Low vs. Dunham Porategovernment Bond | Frost Low vs. Fidelity Series Government | Frost Low vs. Ab Government Exchange | Frost Low vs. Us Government Securities |
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 CEOs Directory module to screen CEOs from public companies around the world.
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