Correlation Between 459200KW0 and Small Cap
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By analyzing existing cross correlation between IBM 45 06 FEB 26 and Small Cap Premium, you can compare the effects of market volatilities on 459200KW0 and Small Cap 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 459200KW0 with a short position of Small Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of 459200KW0 and Small Cap.
Diversification Opportunities for 459200KW0 and Small Cap
Excellent diversification
The 3 months correlation between 459200KW0 and Small is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding IBM 45 06 FEB 26 and Small Cap Premium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Premium and 459200KW0 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 IBM 45 06 FEB 26 are associated (or correlated) with Small Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Cap Premium has no effect on the direction of 459200KW0 i.e., 459200KW0 and Small Cap go up and down completely randomly.
Pair Corralation between 459200KW0 and Small Cap
Assuming the 90 days trading horizon IBM 45 06 FEB 26 is expected to under-perform the Small Cap. But the bond apears to be less risky and, when comparing its historical volatility, IBM 45 06 FEB 26 is 1.83 times less risky than Small Cap. The bond trades about -0.01 of its potential returns per unit of risk. The Small Cap Premium is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,012 in Small Cap Premium on September 12, 2024 and sell it today you would earn a total of 444.00 from holding Small Cap Premium or generate 22.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 82.02% |
| Values | Daily Returns |
IBM 45 06 FEB 26 vs. Small Cap Premium
Performance |
| Timeline |
| IBM 45 06 |
| Small Cap Premium |
459200KW0 and Small Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 459200KW0 and Small Cap
The main advantage of trading using opposite 459200KW0 and Small Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 459200KW0 position performs unexpectedly, Small Cap 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 Small Cap will offset losses from the drop in Small Cap's long position.| 459200KW0 vs. AEP TEX INC | 459200KW0 vs. US BANK NATIONAL | 459200KW0 vs. Alphabet Inc Class C | 459200KW0 vs. InMode |
| Small Cap vs. RiverNorth Specialty Finance | Small Cap vs. Royce Micro Cap | Small Cap vs. Voya Global Advantage | Small Cap vs. Ready Capital |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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