Correlation Between ALM Offensif and ALM Classic
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By analyzing existing cross correlation between ALM Offensif and ALM Classic RA, you can compare the effects of market volatilities on ALM Offensif and ALM Classic 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 ALM Offensif with a short position of ALM Classic. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALM Offensif and ALM Classic.
Diversification Opportunities for ALM Offensif and ALM Classic
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ALM and ALM is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding ALM Offensif and ALM Classic RA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALM Classic RA and ALM Offensif 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 ALM Offensif are associated (or correlated) with ALM Classic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALM Classic RA has no effect on the direction of ALM Offensif i.e., ALM Offensif and ALM Classic go up and down completely randomly.
Pair Corralation between ALM Offensif and ALM Classic
Assuming the 90 days trading horizon ALM Offensif is expected to generate 2.12 times more return on investment than ALM Classic. However, ALM Offensif is 2.12 times more volatile than ALM Classic RA. It trades about 0.24 of its potential returns per unit of risk. ALM Classic RA is currently generating about 0.24 per unit of risk. If you would invest 29,925 in ALM Offensif on September 6, 2024 and sell it today you would earn a total of 2,199 from holding ALM Offensif or generate 7.35% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
ALM Offensif vs. ALM Classic RA
Performance |
Timeline |
ALM Offensif |
ALM Classic RA |
ALM Offensif and ALM Classic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ALM Offensif and ALM Classic
The main advantage of trading using opposite ALM Offensif and ALM Classic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALM Offensif position performs unexpectedly, ALM Classic 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 ALM Classic will offset losses from the drop in ALM Classic's long position.The idea behind ALM Offensif and ALM Classic RA 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.ALM Classic vs. ALM Offensif | ALM Classic vs. Esfera Robotics R | ALM Classic vs. R co Valor F | ALM Classic vs. CM AM Monplus NE |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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