Correlation Between New Alternatives and New Alternatives

Can any of the company-specific risk be diversified away by investing in both New Alternatives and New Alternatives 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 New Alternatives and New Alternatives into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between New Alternatives Fund and New Alternatives Fund, you can compare the effects of market volatilities on New Alternatives and New Alternatives 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 New Alternatives with a short position of New Alternatives. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Alternatives and New Alternatives.

Diversification Opportunities for New Alternatives and New Alternatives

1.0

Correlation Coefficient

New Alternatives  New Alternatives

No risk reduction

The 3 months correlation between New and New is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding New Alternatives Fund and New Alternatives Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Alternatives and New Alternatives 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 New Alternatives Fund are associated (or correlated) with New Alternatives. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Alternatives has no effect on the direction of New Alternatives i.e., New Alternatives and New Alternatives go up and down completely randomly.

Pair Corralation between New Alternatives and New Alternatives

Assuming the 90 days horizon New Alternatives Fund is expected to under-perform the New Alternatives. But the mutual fund apears to be less risky and, when comparing its historical volatility, New Alternatives Fund is 1.0 times less risky than New Alternatives. The mutual fund trades about 0.0 of its potential returns per unit of risk. The New Alternatives Fund is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  6,668  in New Alternatives Fund on September 2, 2024 and sell it today you would lose (32.00) from holding New Alternatives Fund or give up 0.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

New Alternatives Fund  vs.  New Alternatives Fund

New Alternatives

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days New Alternatives Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, New Alternatives is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

New Alternatives

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days New Alternatives Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, New Alternatives is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with New Alternatives and New Alternatives

The main advantage of trading using opposite New Alternatives and New Alternatives positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Alternatives position performs unexpectedly, New Alternatives 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 New Alternatives will offset losses from the drop in New Alternatives' long position.

The idea behind New Alternatives Fund and New Alternatives Fund 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.