Correlation Between Strategic Bond and Ancora/thelen Small-mid

Can any of the company-specific risk be diversified away by investing in both Strategic Bond and Ancora/thelen Small-mid 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 Strategic Bond and Ancora/thelen Small-mid into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Strategic Bond Fund and Ancorathelen Small Mid Cap, you can compare the effects of market volatilities on Strategic Bond and Ancora/thelen Small-mid 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 Strategic Bond with a short position of Ancora/thelen Small-mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Bond and Ancora/thelen Small-mid.

Diversification Opportunities for Strategic Bond and Ancora/thelen Small-mid

-0.64

Correlation Coefficient

Strategic Bond  Ancora/thelen Small-mid

Excellent diversification

The 3 months correlation between Strategic and Ancora/thelen is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Bond Fund and Ancorathelen Small Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ancora/thelen Small-mid and Strategic Bond 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 Strategic Bond Fund are associated (or correlated) with Ancora/thelen Small-mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ancora/thelen Small-mid has no effect on the direction of Strategic Bond i.e., Strategic Bond and Ancora/thelen Small-mid go up and down completely randomly.

Pair Corralation between Strategic Bond and Ancora/thelen Small-mid

Assuming the 90 days horizon Strategic Bond is expected to generate 14.38 times less return on investment than Ancora/thelen Small-mid. But when comparing it to its historical volatility, Strategic Bond Fund is 3.37 times less risky than Ancora/thelen Small-mid. It trades about 0.09 of its potential returns per unit of risk. Ancorathelen Small Mid Cap is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest  2,047  in Ancorathelen Small Mid Cap on September 5, 2024 and sell it today you would earn a total of  212.00  from holding Ancorathelen Small Mid Cap or generate 10.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Strategic Bond Fund  vs.  Ancorathelen Small Mid Cap

Strategic Bond

Risk-Adjusted Performance

0 of 100

Very Weak

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

Ancora/thelen Small-mid

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ancorathelen Small Mid Cap are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Ancora/thelen Small-mid showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Strategic Bond and Ancora/thelen Small-mid

The main advantage of trading using opposite Strategic Bond and Ancora/thelen Small-mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Bond position performs unexpectedly, Ancora/thelen Small-mid 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 Ancora/thelen Small-mid will offset losses from the drop in Ancora/thelen Small-mid's long position.

The idea behind Strategic Bond Fund and Ancorathelen Small Mid Cap 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.