Correlation Between Arrow Managed and Great-west Multi-manager

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Can any of the company-specific risk be diversified away by investing in both Arrow Managed and Great-west Multi-manager 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 Arrow Managed and Great-west Multi-manager into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow Managed Futures and Great West Multi Manager Small, you can compare the effects of market volatilities on Arrow Managed and Great-west Multi-manager 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 Arrow Managed with a short position of Great-west Multi-manager. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Managed and Great-west Multi-manager.

Diversification Opportunities for Arrow Managed and Great-west Multi-manager

-0.18
  Correlation Coefficient

Good diversification

The 3 months correlation between Arrow and Great-west is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Managed Futures and Great West Multi Manager Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great-west Multi-manager and Arrow Managed 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 Arrow Managed Futures are associated (or correlated) with Great-west Multi-manager. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great-west Multi-manager has no effect on the direction of Arrow Managed i.e., Arrow Managed and Great-west Multi-manager go up and down completely randomly.

Pair Corralation between Arrow Managed and Great-west Multi-manager

Assuming the 90 days horizon Arrow Managed is expected to generate 3.67 times less return on investment than Great-west Multi-manager. In addition to that, Arrow Managed is 1.34 times more volatile than Great West Multi Manager Small. It trades about 0.01 of its total potential returns per unit of risk. Great West Multi Manager Small is currently generating about 0.05 per unit of volatility. If you would invest  948.00  in Great West Multi Manager Small on September 4, 2024 and sell it today you would earn a total of  302.00  from holding Great West Multi Manager Small or generate 31.86% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Arrow Managed Futures  vs.  Great West Multi Manager Small

 Performance 
       Timeline  
Arrow Managed Futures 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Arrow Managed Futures are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Arrow Managed is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Great-west Multi-manager 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Great West Multi Manager Small are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Great-west Multi-manager may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Arrow Managed and Great-west Multi-manager Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Arrow Managed and Great-west Multi-manager

The main advantage of trading using opposite Arrow Managed and Great-west Multi-manager positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Managed position performs unexpectedly, Great-west Multi-manager 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 Great-west Multi-manager will offset losses from the drop in Great-west Multi-manager's long position.
The idea behind Arrow Managed Futures and Great West Multi Manager Small 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.
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.

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