Correlation Between Acm Dynamic and Fabxx

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

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

Diversification Opportunities for Acm Dynamic and Fabxx

0.26

Correlation Coefficient

Acm Dynamic  Fabxx

Modest diversification

The 3 months correlation between Acm and Fabxx is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Acm Dynamic Opportunity and Fabxx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fabxx and Acm Dynamic 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 Acm Dynamic Opportunity are associated (or correlated) with Fabxx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fabxx has no effect on the direction of Acm Dynamic i.e., Acm Dynamic and Fabxx go up and down completely randomly.

Pair Corralation between Acm Dynamic and Fabxx

Assuming the 90 days horizon Acm Dynamic Opportunity is expected to under-perform the Fabxx. But the mutual fund apears to be less risky and, when comparing its historical volatility, Acm Dynamic Opportunity is 4.62 times less risky than Fabxx. The mutual fund trades about -0.14 of its potential returns per unit of risk. The Fabxx is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  230.00  in Fabxx on December 2, 2024 and sell it today you would lose (75.00) from holding Fabxx or give up 32.61% of portfolio value over 90 days.

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

Acm Dynamic Opportunity  vs.  Fabxx

Acm Dynamic Opportunity

Risk-Adjusted Performance

Very Weak

Over the last 90 days Acm Dynamic Opportunity has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Fabxx

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fabxx are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Fabxx showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Acm Dynamic and Fabxx

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

The idea behind Acm Dynamic Opportunity and Fabxx 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 Commodity Directory module to find actively traded commodities issued by global exchanges.