Correlation Between Brinker Capital and Aam/himco Short

Can any of the company-specific risk be diversified away by investing in both Brinker Capital and Aam/himco Short 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 Brinker Capital and Aam/himco Short into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Brinker Capital Destinations and Aamhimco Short Duration, you can compare the effects of market volatilities on Brinker Capital and Aam/himco Short 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 Brinker Capital with a short position of Aam/himco Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brinker Capital and Aam/himco Short.

Diversification Opportunities for Brinker Capital and Aam/himco Short

0.68

Correlation Coefficient

Brinker Capital  Aam/himco Short

Poor diversification

The 3 months correlation between Brinker and Aam/himco is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Brinker Capital Destinations and Aamhimco Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aamhimco Short Duration and Brinker Capital 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 Brinker Capital Destinations are associated (or correlated) with Aam/himco Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aamhimco Short Duration has no effect on the direction of Brinker Capital i.e., Brinker Capital and Aam/himco Short go up and down completely randomly.

Pair Corralation between Brinker Capital and Aam/himco Short

Assuming the 90 days horizon Brinker Capital Destinations is expected to generate 7.59 times more return on investment than Aam/himco Short. However, Brinker Capital is 7.59 times more volatile than Aamhimco Short Duration. It trades about 0.12 of its potential returns per unit of risk. Aamhimco Short Duration is currently generating about 0.21 per unit of risk. If you would invest  1,114  in Brinker Capital Destinations on October 26, 2024 and sell it today you would earn a total of  108.00  from holding Brinker Capital Destinations or generate 9.69% return on investment over 90 days.

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

Brinker Capital Destinations  vs.  Aamhimco Short Duration

Brinker Capital Dest

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Brinker Capital Destinations are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Brinker Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Aamhimco Short Duration

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aamhimco Short Duration are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Aam/himco Short is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Brinker Capital and Aam/himco Short

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

The idea behind Brinker Capital Destinations and Aamhimco Short Duration 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.