Correlation Between Alphacentric Symmetry and Russell 2000
Can any of the company-specific risk be diversified away by investing in both Alphacentric Symmetry and Russell 2000 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 Alphacentric Symmetry and Russell 2000 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alphacentric Symmetry Strategy and Russell 2000 15x, you can compare the effects of market volatilities on Alphacentric Symmetry and Russell 2000 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 Alphacentric Symmetry with a short position of Russell 2000. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphacentric Symmetry and Russell 2000.
Diversification Opportunities for Alphacentric Symmetry and Russell 2000
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Alphacentric and Russell is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Alphacentric Symmetry Strategy and Russell 2000 15x in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Russell 2000 15x and Alphacentric Symmetry 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 Alphacentric Symmetry Strategy are associated (or correlated) with Russell 2000. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Russell 2000 15x has no effect on the direction of Alphacentric Symmetry i.e., Alphacentric Symmetry and Russell 2000 go up and down completely randomly.
Pair Corralation between Alphacentric Symmetry and Russell 2000
Assuming the 90 days horizon Alphacentric Symmetry is expected to generate 2.47 times less return on investment than Russell 2000. But when comparing it to its historical volatility, Alphacentric Symmetry Strategy is 3.53 times less risky than Russell 2000. It trades about 0.17 of its potential returns per unit of risk. Russell 2000 15x is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 5,632 in Russell 2000 15x on November 3, 2024 and sell it today you would earn a total of 194.00 from holding Russell 2000 15x or generate 3.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alphacentric Symmetry Strategy vs. Russell 2000 15x
Performance |
| Timeline |
| Alphacentric Symmetry |
| Russell 2000 15x |
Alphacentric Symmetry and Russell 2000 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alphacentric Symmetry and Russell 2000
The main advantage of trading using opposite Alphacentric Symmetry and Russell 2000 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphacentric Symmetry position performs unexpectedly, Russell 2000 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 Russell 2000 will offset losses from the drop in Russell 2000's long position.| Alphacentric Symmetry vs. Live Oak Health | Alphacentric Symmetry vs. Highland Longshort Healthcare | Alphacentric Symmetry vs. Blackrock Health Sciences | Alphacentric Symmetry vs. Blackrock Health Sciences |
| Russell 2000 vs. Vy Columbia Small | Russell 2000 vs. Lebenthal Lisanti Small | Russell 2000 vs. Hunter Small Cap | Russell 2000 vs. Oklahoma College Savings |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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