Correlation Between Aegis Value and Alpine Dynamic

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

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

Diversification Opportunities for Aegis Value and Alpine Dynamic

0.69

Correlation Coefficient

Aegis Value  Alpine Dynamic

Poor diversification

The 3 months correlation between Aegis and Alpine is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Aegis Value Fund and Alpine Dynamic Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpine Dynamic Dividend and Aegis Value 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 Aegis Value Fund are associated (or correlated) with Alpine Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpine Dynamic Dividend has no effect on the direction of Aegis Value i.e., Aegis Value and Alpine Dynamic go up and down completely randomly.

Pair Corralation between Aegis Value and Alpine Dynamic

Assuming the 90 days horizon Aegis Value Fund is expected to under-perform the Alpine Dynamic. In addition to that, Aegis Value is 2.9 times more volatile than Alpine Dynamic Dividend. It trades about -0.22 of its total potential returns per unit of risk. Alpine Dynamic Dividend is currently generating about -0.17 per unit of volatility. If you would invest  442.00  in Alpine Dynamic Dividend on October 7, 2024 and sell it today you would lose (11.00) from holding Alpine Dynamic Dividend or give up 2.49% of portfolio value over 90 days.

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

Aegis Value Fund  vs.  Alpine Dynamic Dividend

Aegis Value Fund

Risk-Adjusted Performance

0 of 100

Very Weak

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

Alpine Dynamic Dividend

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Aegis Value and Alpine Dynamic

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

The idea behind Aegis Value Fund and Alpine Dynamic Dividend 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.