Correlation Between Black Oak and Crawford Multi-asset

Can any of the company-specific risk be diversified away by investing in both Black Oak and Crawford Multi-asset 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 Black Oak and Crawford Multi-asset into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Black Oak Emerging and Crawford Multi Asset Income, you can compare the effects of market volatilities on Black Oak and Crawford Multi-asset 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 Black Oak with a short position of Crawford Multi-asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Oak and Crawford Multi-asset.

Diversification Opportunities for Black Oak and Crawford Multi-asset

0.61

Correlation Coefficient

Black Oak  Crawford Multi-asset

Poor diversification

The 3 months correlation between Black and Crawford is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Black Oak Emerging and Crawford Multi Asset Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crawford Multi Asset and Black Oak 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 Black Oak Emerging are associated (or correlated) with Crawford Multi-asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crawford Multi Asset has no effect on the direction of Black Oak i.e., Black Oak and Crawford Multi-asset go up and down completely randomly.

Pair Corralation between Black Oak and Crawford Multi-asset

Assuming the 90 days horizon Black Oak is expected to generate 1.0 times less return on investment than Crawford Multi-asset. In addition to that, Black Oak is 2.58 times more volatile than Crawford Multi Asset Income. It trades about 0.02 of its total potential returns per unit of risk. Crawford Multi Asset Income is currently generating about 0.06 per unit of volatility. If you would invest  2,319  in Crawford Multi Asset Income on October 20, 2024 and sell it today you would earn a total of  372.00  from holding Crawford Multi Asset Income or generate 16.04% return on investment over 90 days.

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

Black Oak Emerging  vs.  Crawford Multi Asset Income

Black Oak Emerging

Risk-Adjusted Performance

0 of 100

Very Weak

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

Crawford Multi Asset

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Black Oak and Crawford Multi-asset

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

The idea behind Black Oak Emerging and Crawford Multi Asset Income 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.