Correlation Between Asg Managed and Government Street

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

By analyzing existing cross correlation between Asg Managed Futures and Government Street Equity, you can compare the effects of market volatilities on Asg Managed and Government Street 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 Asg Managed with a short position of Government Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asg Managed and Government Street.

Diversification Opportunities for Asg Managed and Government Street

0.79

Correlation Coefficient

Asg Managed  Government Street

Poor diversification

The 3 months correlation between Asg and Government is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Asg Managed Futures and Government Street Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Government Street Equity and Asg Managed 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 Asg Managed Futures are associated (or correlated) with Government Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Government Street Equity has no effect on the direction of Asg Managed i.e., Asg Managed and Government Street go up and down completely randomly.

Pair Corralation between Asg Managed and Government Street

Assuming the 90 days horizon Asg Managed Futures is expected to under-perform the Government Street. But the mutual fund apears to be less risky and, when comparing its historical volatility, Asg Managed Futures is 1.34 times less risky than Government Street. The mutual fund trades about -0.1 of its potential returns per unit of risk. The Government Street Equity is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  12,837  in Government Street Equity on December 21, 2024 and sell it today you would lose (601.00) from holding Government Street Equity or give up 4.68% of portfolio value over 90 days.

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

Asg Managed Futures  vs.  Government Street Equity

Asg Managed Futures

Risk-Adjusted Performance

Very Weak

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

Government Street Equity

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Asg Managed and Government Street

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

The idea behind Asg Managed Futures and Government Street Equity 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.