Correlation Between Ambrus Core and Pacific Funds

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Can any of the company-specific risk be diversified away by investing in both Ambrus Core and Pacific Funds 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 Ambrus Core and Pacific Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ambrus Core Bond and Pacific Funds Strategic, you can compare the effects of market volatilities on Ambrus Core and Pacific Funds 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 Ambrus Core with a short position of Pacific Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambrus Core and Pacific Funds.

Diversification Opportunities for Ambrus Core and Pacific Funds

0.81
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Ambrus and Pacific is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Ambrus Core Bond and Pacific Funds Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Funds Strategic and Ambrus Core 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 Ambrus Core Bond are associated (or correlated) with Pacific Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Funds Strategic has no effect on the direction of Ambrus Core i.e., Ambrus Core and Pacific Funds go up and down completely randomly.

Pair Corralation between Ambrus Core and Pacific Funds

Assuming the 90 days horizon Ambrus Core is expected to generate 1.38 times less return on investment than Pacific Funds. In addition to that, Ambrus Core is 1.0 times more volatile than Pacific Funds Strategic. It trades about 0.1 of its total potential returns per unit of risk. Pacific Funds Strategic is currently generating about 0.13 per unit of volatility. If you would invest  944.00  in Pacific Funds Strategic on September 12, 2024 and sell it today you would earn a total of  117.00  from holding Pacific Funds Strategic or generate 12.39% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy99.73%
ValuesDaily Returns

Ambrus Core Bond  vs.  Pacific Funds Strategic

 Performance 
       Timeline  
Ambrus Core Bond 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Ambrus Core Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental drivers, Ambrus Core is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Pacific Funds Strategic 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Pacific Funds Strategic are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Pacific Funds is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ambrus Core and Pacific Funds Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ambrus Core and Pacific Funds

The main advantage of trading using opposite Ambrus Core and Pacific Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambrus Core position performs unexpectedly, Pacific Funds 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 Pacific Funds will offset losses from the drop in Pacific Funds' long position.
The idea behind Ambrus Core Bond and Pacific Funds Strategic pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

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