Correlation Between Acruence Active and Northern Lights
Can any of the company-specific risk be diversified away by investing in both Acruence Active and Northern Lights 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 Acruence Active and Northern Lights into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acruence Active Hedge and Northern Lights, you can compare the effects of market volatilities on Acruence Active and Northern Lights 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 Acruence Active with a short position of Northern Lights. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acruence Active and Northern Lights.
Diversification Opportunities for Acruence Active and Northern Lights
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Acruence and Northern is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Acruence Active Hedge and Northern Lights in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Lights and Acruence Active 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 Acruence Active Hedge are associated (or correlated) with Northern Lights. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Lights has no effect on the direction of Acruence Active i.e., Acruence Active and Northern Lights go up and down completely randomly.
Pair Corralation between Acruence Active and Northern Lights
Given the investment horizon of 90 days Acruence Active Hedge is expected to under-perform the Northern Lights. In addition to that, Acruence Active is 1.81 times more volatile than Northern Lights. It trades about -0.1 of its total potential returns per unit of risk. Northern Lights is currently generating about 0.02 per unit of volatility. If you would invest 3,579 in Northern Lights on November 28, 2024 and sell it today you would earn a total of 6.00 from holding Northern Lights or generate 0.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acruence Active Hedge vs. Northern Lights
Performance |
| Timeline |
| Acruence Active Hedge |
| Northern Lights |
Acruence Active and Northern Lights Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acruence Active and Northern Lights
The main advantage of trading using opposite Acruence Active and Northern Lights positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acruence Active position performs unexpectedly, Northern Lights 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 Northern Lights will offset losses from the drop in Northern Lights' long position.| Acruence Active vs. ZEGA Buy and | Acruence Active vs. Innovator Equity Accelerated | Acruence Active vs. Innovator SP 500 | Acruence Active vs. Innovator SP 500 |
| Northern Lights vs. Sterling Capital Focus | Northern Lights vs. Northern Lights | Northern Lights vs. First Trust Exchange Traded | Northern Lights vs. Northern Lights |
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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