Correlation Between Commodities Strategy and Hunter Small
Can any of the company-specific risk be diversified away by investing in both Commodities Strategy and Hunter 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 Commodities Strategy and Hunter Small 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 Hunter Small Cap, you can compare the effects of market volatilities on Commodities Strategy and Hunter 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 Commodities Strategy with a short position of Hunter Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commodities Strategy and Hunter Small.
Diversification Opportunities for Commodities Strategy and Hunter Small
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Commodities and Hunter is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Commodities Strategy Fund and Hunter Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunter Small Cap 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 Hunter Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunter Small Cap has no effect on the direction of Commodities Strategy i.e., Commodities Strategy and Hunter Small go up and down completely randomly.
Pair Corralation between Commodities Strategy and Hunter Small
Assuming the 90 days horizon Commodities Strategy Fund is expected to generate 0.55 times more return on investment than Hunter Small. However, Commodities Strategy Fund is 1.82 times less risky than Hunter Small. It trades about 0.23 of its potential returns per unit of risk. Hunter Small Cap is currently generating about -0.33 per unit of risk. If you would invest 2,978 in Commodities Strategy Fund on October 12, 2024 and sell it today you would earn a total of 67.00 from holding Commodities Strategy Fund or generate 2.25% 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. Hunter Small Cap
Performance |
| Timeline |
| Commodities Strategy |
| Hunter Small Cap |
Commodities Strategy and Hunter Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commodities Strategy and Hunter Small
The main advantage of trading using opposite Commodities Strategy and Hunter Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commodities Strategy position performs unexpectedly, Hunter 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 Hunter Small will offset losses from the drop in Hunter Small'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 |
| Hunter Small vs. Artisan High Income | Hunter Small vs. Buffalo High Yield | Hunter Small vs. Siit High Yield | Hunter Small vs. T Rowe Price |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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