Correlation Between Westwood Market and Alphacentric Symmetry
Can any of the company-specific risk be diversified away by investing in both Westwood Market and Alphacentric Symmetry 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 Westwood Market and Alphacentric Symmetry into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westwood Market Neutral and Alphacentric Symmetry Strategy, you can compare the effects of market volatilities on Westwood Market and Alphacentric Symmetry 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 Westwood Market with a short position of Alphacentric Symmetry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westwood Market and Alphacentric Symmetry.
Diversification Opportunities for Westwood Market and Alphacentric Symmetry
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Westwood and Alphacentric is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Westwood Market Neutral and Alphacentric Symmetry Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alphacentric Symmetry and Westwood Market 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 Westwood Market Neutral are associated (or correlated) with Alphacentric Symmetry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alphacentric Symmetry has no effect on the direction of Westwood Market i.e., Westwood Market and Alphacentric Symmetry go up and down completely randomly.
Pair Corralation between Westwood Market and Alphacentric Symmetry
Assuming the 90 days horizon Westwood Market Neutral is expected to generate 0.2 times more return on investment than Alphacentric Symmetry. However, Westwood Market Neutral is 4.95 times less risky than Alphacentric Symmetry. It trades about 0.4 of its potential returns per unit of risk. Alphacentric Symmetry Strategy is currently generating about 0.0 per unit of risk. If you would invest 966.00 in Westwood Market Neutral on October 25, 2024 and sell it today you would earn a total of 7.00 from holding Westwood Market Neutral or generate 0.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westwood Market Neutral vs. Alphacentric Symmetry Strategy
Performance |
| Timeline |
| Westwood Market Neutral |
| Alphacentric Symmetry |
Westwood Market and Alphacentric Symmetry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westwood Market and Alphacentric Symmetry
The main advantage of trading using opposite Westwood Market and Alphacentric Symmetry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westwood Market position performs unexpectedly, Alphacentric Symmetry 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 Alphacentric Symmetry will offset losses from the drop in Alphacentric Symmetry's long position.| Westwood Market vs. Legg Mason Global | Westwood Market vs. Ab Global Bond | Westwood Market vs. Qs Global Equity | Westwood Market vs. Aqr Global Macro |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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