Correlation Between The Arbitrage and Hussman Strategic

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

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

Diversification Opportunities for The Arbitrage and Hussman Strategic

0.46

Correlation Coefficient

The Arbitrage  Hussman Strategic

Very weak diversification

The 3 months correlation between The and Hussman is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding The Arbitrage Fund and Hussman Strategic Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hussman Strategic Growth and The Arbitrage 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 The Arbitrage Fund are associated (or correlated) with Hussman Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hussman Strategic Growth has no effect on the direction of The Arbitrage i.e., The Arbitrage and Hussman Strategic go up and down completely randomly.

Pair Corralation between The Arbitrage and Hussman Strategic

Assuming the 90 days horizon The Arbitrage is expected to generate 2.84 times less return on investment than Hussman Strategic. But when comparing it to its historical volatility, The Arbitrage Fund is 4.73 times less risky than Hussman Strategic. It trades about 0.31 of its potential returns per unit of risk. Hussman Strategic Growth is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  545.00  in Hussman Strategic Growth on December 20, 2024 and sell it today you would earn a total of  50.00  from holding Hussman Strategic Growth or generate 9.17% return on investment over 90 days.

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

The Arbitrage Fund  vs.  Hussman Strategic Growth

The Arbitrage

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in The Arbitrage Fund are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, The Arbitrage is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Hussman Strategic Growth

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hussman Strategic Growth are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Hussman Strategic may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with The Arbitrage and Hussman Strategic

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

The idea behind The Arbitrage Fund and Hussman Strategic Growth 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..