Correlation Between Ambrus Core and Aggressive Balanced

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

By analyzing existing cross correlation between Ambrus Core Bond and Aggressive Balanced Allocation, you can compare the effects of market volatilities on Ambrus Core and Aggressive Balanced 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 Ambrus Core with a short position of Aggressive Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambrus Core and Aggressive Balanced.

Diversification Opportunities for Ambrus Core and Aggressive Balanced

-0.53

Correlation Coefficient

Ambrus Core  Aggressive Balanced

Excellent diversification

The 3 months correlation between Ambrus and Aggressive is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Ambrus Core Bond and Aggressive Balanced Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aggressive Balanced and Ambrus Core 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 Ambrus Core Bond are associated (or correlated) with Aggressive Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aggressive Balanced has no effect on the direction of Ambrus Core i.e., Ambrus Core and Aggressive Balanced go up and down completely randomly.

Pair Corralation between Ambrus Core and Aggressive Balanced

Assuming the 90 days horizon Ambrus Core Bond is expected to under-perform the Aggressive Balanced. But the mutual fund apears to be less risky and, when comparing its historical volatility, Ambrus Core Bond is 3.27 times less risky than Aggressive Balanced. The mutual fund trades about -0.05 of its potential returns per unit of risk. The Aggressive Balanced Allocation is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  1,172  in Aggressive Balanced Allocation on September 12, 2024 and sell it today you would earn a total of  79.00  from holding Aggressive Balanced Allocation or generate 6.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Ambrus Core Bond  vs.  Aggressive Balanced Allocation

Ambrus Core Bond

Risk-Adjusted Performance

0 of 100

Very Weak

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

Aggressive Balanced

Risk-Adjusted Performance

14 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Aggressive Balanced Allocation are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Aggressive Balanced may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Ambrus Core and Aggressive Balanced

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

The idea behind Ambrus Core Bond and Aggressive Balanced Allocation 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.