Correlation Between Commodities Strategy and Frontier Mfg
Can any of the company-specific risk be diversified away by investing in both Commodities Strategy and Frontier Mfg 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 Commodities Strategy and Frontier Mfg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commodities Strategy Fund and Frontier Mfg Global, you can compare the effects of market volatilities on Commodities Strategy and Frontier Mfg 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 Commodities Strategy with a short position of Frontier Mfg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commodities Strategy and Frontier Mfg.
Diversification Opportunities for Commodities Strategy and Frontier Mfg
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Commodities and Frontier is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Commodities Strategy Fund and Frontier Mfg Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frontier Mfg Global and Commodities Strategy 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 Commodities Strategy Fund are associated (or correlated) with Frontier Mfg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frontier Mfg Global has no effect on the direction of Commodities Strategy i.e., Commodities Strategy and Frontier Mfg go up and down completely randomly.
Pair Corralation between Commodities Strategy and Frontier Mfg
Assuming the 90 days horizon Commodities Strategy is expected to generate 1.5 times less return on investment than Frontier Mfg. In addition to that, Commodities Strategy is 1.74 times more volatile than Frontier Mfg Global. It trades about 0.13 of its total potential returns per unit of risk. Frontier Mfg Global is currently generating about 0.34 per unit of volatility. If you would invest 1,457 in Frontier Mfg Global on November 4, 2024 and sell it today you would earn a total of 56.00 from holding Frontier Mfg Global or generate 3.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commodities Strategy Fund vs. Frontier Mfg Global
Performance |
| Timeline |
| Commodities Strategy |
| Frontier Mfg Global |
Commodities Strategy and Frontier Mfg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commodities Strategy and Frontier Mfg
The main advantage of trading using opposite Commodities Strategy and Frontier Mfg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commodities Strategy position performs unexpectedly, Frontier Mfg 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 Frontier Mfg will offset losses from the drop in Frontier Mfg's long position.| Commodities Strategy vs. Basic Materials Fund | Commodities Strategy vs. Energy Services Fund | Commodities Strategy vs. Energy Fund Investor | Commodities Strategy vs. Real Estate Fund |
| Frontier Mfg vs. Frontier Mfg E | Frontier Mfg vs. Frontier Mfg E | Frontier Mfg vs. Frontier Mfg Global | Frontier Mfg vs. American Century One |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |