Correlation Between Intal High and Aggressive Balanced

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

By analyzing existing cross correlation between Intal High Relative and Aggressive Balanced Allocation, you can compare the effects of market volatilities on Intal High and Aggressive Balanced 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 Intal High with a short position of Aggressive Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intal High and Aggressive Balanced.

Diversification Opportunities for Intal High and Aggressive Balanced

0.44

Correlation Coefficient

Intal High  Aggressive Balanced

Very weak diversification

The 3 months correlation between Intal and Aggressive is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Intal High Relative and Aggressive Balanced Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aggressive Balanced and Intal High 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 Intal High Relative are associated (or correlated) with Aggressive Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aggressive Balanced has no effect on the direction of Intal High i.e., Intal High and Aggressive Balanced go up and down completely randomly.

Pair Corralation between Intal High and Aggressive Balanced

Assuming the 90 days horizon Intal High Relative is expected to generate 0.99 times more return on investment than Aggressive Balanced. However, Intal High Relative is 1.01 times less risky than Aggressive Balanced. It trades about 0.25 of its potential returns per unit of risk. Aggressive Balanced Allocation is currently generating about 0.16 per unit of risk. If you would invest  1,254  in Intal High Relative on October 26, 2024 and sell it today you would earn a total of  39.00  from holding Intal High Relative or generate 3.11% return on investment over 90 days.

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

Intal High Relative  vs.  Aggressive Balanced Allocation

Intal High Relative

Risk-Adjusted Performance

0 of 100

Very Weak

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

Aggressive Balanced

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aggressive Balanced Allocation are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Aggressive Balanced is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Intal High and Aggressive Balanced

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

The idea behind Intal High Relative and Aggressive Balanced Allocation 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.