Correlation Between Ancora Microcap and Ancora Income

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

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

Diversification Opportunities for Ancora Microcap and Ancora Income

0.01

Correlation Coefficient

Ancora Microcap  Ancora Income

Significant diversification

The 3 months correlation between Ancora and ANCORA is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Ancora Microcap Fund and Ancora Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ancora Income and Ancora Microcap 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 Ancora Microcap Fund are associated (or correlated) with Ancora Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ancora Income has no effect on the direction of Ancora Microcap i.e., Ancora Microcap and Ancora Income go up and down completely randomly.

Pair Corralation between Ancora Microcap and Ancora Income

Assuming the 90 days horizon Ancora Microcap Fund is expected to under-perform the Ancora Income. In addition to that, Ancora Microcap is 2.82 times more volatile than Ancora Income Fund. It trades about -0.08 of its total potential returns per unit of risk. Ancora Income Fund is currently generating about -0.02 per unit of volatility. If you would invest  715.00  in Ancora Income Fund on December 29, 2024 and sell it today you would lose (3.00) from holding Ancora Income Fund or give up 0.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Ancora Microcap Fund  vs.  Ancora Income Fund

Ancora Microcap

Risk-Adjusted Performance

Very Weak

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

Ancora Income

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Ancora Microcap and Ancora Income

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

The idea behind Ancora Microcap Fund and Ancora Income Fund 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.

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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.