Correlation Between Alpine High and Bear Profund

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

By analyzing existing cross correlation between Alpine High Yield and Bear Profund Bear, you can compare the effects of market volatilities on Alpine High and Bear Profund 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 Alpine High with a short position of Bear Profund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpine High and Bear Profund.

Diversification Opportunities for Alpine High and Bear Profund

-0.15

Correlation Coefficient

Alpine High  Bear Profund

Good diversification

The 3 months correlation between Alpine and Bear is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Alpine High Yield and Bear Profund Bear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bear Profund Bear and Alpine High 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 Alpine High Yield are associated (or correlated) with Bear Profund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bear Profund Bear has no effect on the direction of Alpine High i.e., Alpine High and Bear Profund go up and down completely randomly.

Pair Corralation between Alpine High and Bear Profund

Assuming the 90 days horizon Alpine High Yield is expected to generate 0.09 times more return on investment than Bear Profund. However, Alpine High Yield is 10.98 times less risky than Bear Profund. It trades about -0.3 of its potential returns per unit of risk. Bear Profund Bear is currently generating about -0.12 per unit of risk. If you would invest  928.00  in Alpine High Yield on October 6, 2024 and sell it today you would lose (9.00) from holding Alpine High Yield or give up 0.97% of portfolio value over 90 days.

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

Alpine High Yield  vs.  Bear Profund Bear

Alpine High Yield

Risk-Adjusted Performance

0 of 100

Very Weak

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

Bear Profund Bear

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bear Profund Bear has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Alpine High and Bear Profund

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

The idea behind Alpine High Yield and Bear Profund Bear 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.