Correlation Between AlphaMark Actively and Alexis Practical

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

By analyzing existing cross correlation between AlphaMark Actively Managed and Alexis Practical Tactical, you can compare the effects of market volatilities on AlphaMark Actively and Alexis Practical 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 AlphaMark Actively with a short position of Alexis Practical. Check out your portfolio center. Please also check ongoing floating volatility patterns of AlphaMark Actively and Alexis Practical.

Diversification Opportunities for AlphaMark Actively and Alexis Practical

0.17

Correlation Coefficient

AlphaMark Actively  Alexis Practical

Average diversification

The 3 months correlation between AlphaMark and Alexis is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding AlphaMark Actively Managed and Alexis Practical Tactical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alexis Practical Tactical and AlphaMark Actively 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 AlphaMark Actively Managed are associated (or correlated) with Alexis Practical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alexis Practical Tactical has no effect on the direction of AlphaMark Actively i.e., AlphaMark Actively and Alexis Practical go up and down completely randomly.

Pair Corralation between AlphaMark Actively and Alexis Practical

Given the investment horizon of 90 days AlphaMark Actively Managed is expected to generate 241.02 times more return on investment than Alexis Practical. However, AlphaMark Actively is 241.02 times more volatile than Alexis Practical Tactical. It trades about 0.22 of its potential returns per unit of risk. Alexis Practical Tactical is currently generating about -0.11 per unit of risk. If you would invest  297.00  in AlphaMark Actively Managed on September 24, 2024 and sell it today you would earn a total of  2,970  from holding AlphaMark Actively Managed or generate 999.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

AlphaMark Actively Managed  vs.  Alexis Practical Tactical

AlphaMark Actively

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AlphaMark Actively Managed are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent fundamental indicators, AlphaMark Actively reported solid returns over the last few months and may actually be approaching a breakup point.

Alexis Practical Tactical

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Alexis Practical Tactical are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Alexis Practical is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with AlphaMark Actively and Alexis Practical

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

The idea behind AlphaMark Actively Managed and Alexis Practical Tactical 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.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.