Correlation Between Science Technology and Altegris Futures
Can any of the company-specific risk be diversified away by investing in both Science Technology and Altegris Futures 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 Science Technology and Altegris Futures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Science Technology Fund and Altegris Futures Evolution, you can compare the effects of market volatilities on Science Technology and Altegris Futures 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 Science Technology with a short position of Altegris Futures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Science Technology and Altegris Futures.
Diversification Opportunities for Science Technology and Altegris Futures
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Science and Altegris is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Science Technology Fund and Altegris Futures Evolution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altegris Futures Evo and Science Technology 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 Science Technology Fund are associated (or correlated) with Altegris Futures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altegris Futures Evo has no effect on the direction of Science Technology i.e., Science Technology and Altegris Futures go up and down completely randomly.
Pair Corralation between Science Technology and Altegris Futures
Assuming the 90 days horizon Science Technology Fund is expected to generate 2.42 times more return on investment than Altegris Futures. However, Science Technology is 2.42 times more volatile than Altegris Futures Evolution. It trades about 0.09 of its potential returns per unit of risk. Altegris Futures Evolution is currently generating about 0.03 per unit of risk. If you would invest 1,673 in Science Technology Fund on September 5, 2024 and sell it today you would earn a total of 1,286 from holding Science Technology Fund or generate 76.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Science Technology Fund vs. Altegris Futures Evolution
Performance |
| Timeline |
| Science Technology |
| Altegris Futures Evo |
Science Technology and Altegris Futures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Science Technology and Altegris Futures
The main advantage of trading using opposite Science Technology and Altegris Futures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Science Technology position performs unexpectedly, Altegris Futures 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 Altegris Futures will offset losses from the drop in Altegris Futures' long position.| Science Technology vs. Volumetric Fund Volumetric | Science Technology vs. Issachar Fund Class | Science Technology vs. Auer Growth Fund | Science Technology vs. Balanced Fund Investor |
| Altegris Futures vs. Altegrisaaca Opportunistic Real | Altegris Futures vs. Altegris Futures Evolution | Altegris Futures vs. Altegris Futures Evolution | Altegris Futures vs. American Mutual Fund |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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