Correlation Between Balanced Fund and Bts Managed
Can any of the company-specific risk be diversified away by investing in both Balanced Fund and Bts Managed 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 Balanced Fund and Bts Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Balanced Fund Investor and Bts Managed Income, you can compare the effects of market volatilities on Balanced Fund and Bts Managed 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 Balanced Fund with a short position of Bts Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balanced Fund and Bts Managed.
Diversification Opportunities for Balanced Fund and Bts Managed
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Balanced and Bts is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Fund Investor and Bts Managed Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bts Managed Income and Balanced Fund 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 Balanced Fund Investor are associated (or correlated) with Bts Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bts Managed Income has no effect on the direction of Balanced Fund i.e., Balanced Fund and Bts Managed go up and down completely randomly.
Pair Corralation between Balanced Fund and Bts Managed
Assuming the 90 days horizon Balanced Fund Investor is expected to generate 2.19 times more return on investment than Bts Managed. However, Balanced Fund is 2.19 times more volatile than Bts Managed Income. It trades about 0.09 of its potential returns per unit of risk. Bts Managed Income is currently generating about 0.11 per unit of risk. If you would invest 1,976 in Balanced Fund Investor on September 18, 2024 and sell it today you would earn a total of 50.00 from holding Balanced Fund Investor or generate 2.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Balanced Fund Investor vs. Bts Managed Income
Performance |
Timeline |
Balanced Fund Investor |
Bts Managed Income |
Balanced Fund and Bts Managed Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Balanced Fund and Bts Managed
The main advantage of trading using opposite Balanced Fund and Bts Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balanced Fund position performs unexpectedly, Bts Managed 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 Bts Managed will offset losses from the drop in Bts Managed's long position.Balanced Fund vs. Strategic Allocation Servative | Balanced Fund vs. Strategic Allocation Aggressive | Balanced Fund vs. Value Fund Investor | Balanced Fund vs. International Growth Fund |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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