Correlation Between Destinations Small-mid and Altegris Futures

Can any of the company-specific risk be diversified away by investing in both Destinations Small-mid and Altegris Futures 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 Destinations Small-mid and Altegris Futures into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Destinations Small Mid Cap and Altegris Futures Evolution, you can compare the effects of market volatilities on Destinations Small-mid and Altegris Futures 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 Destinations Small-mid with a short position of Altegris Futures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Destinations Small-mid and Altegris Futures.

Diversification Opportunities for Destinations Small-mid and Altegris Futures

-0.45

Correlation Coefficient

Destinations Small-mid  Altegris Futures

Very good diversification

The 3 months correlation between Destinations and Altegris is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Destinations Small Mid Cap and Altegris Futures Evolution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altegris Futures Evo and Destinations Small-mid 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 Destinations Small Mid Cap are associated (or correlated) with Altegris Futures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altegris Futures Evo has no effect on the direction of Destinations Small-mid i.e., Destinations Small-mid and Altegris Futures go up and down completely randomly.

Pair Corralation between Destinations Small-mid and Altegris Futures

Assuming the 90 days horizon Destinations Small Mid Cap is expected to generate 2.42 times more return on investment than Altegris Futures. However, Destinations Small-mid is 2.42 times more volatile than Altegris Futures Evolution. It trades about 0.04 of its potential returns per unit of risk. Altegris Futures Evolution is currently generating about 0.02 per unit of risk. If you would invest  901.00  in Destinations Small Mid Cap on October 22, 2024 and sell it today you would earn a total of  92.00  from holding Destinations Small Mid Cap or generate 10.21% return on investment over 90 days.

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

Destinations Small Mid Cap  vs.  Altegris Futures Evolution

Destinations Small Mid

Risk-Adjusted Performance

0 of 100

Very Weak

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

Altegris Futures Evo

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Altegris Futures Evolution are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Altegris Futures is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Destinations Small-mid and Altegris Futures

The main advantage of trading using opposite Destinations Small-mid and Altegris Futures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Destinations Small-mid position performs unexpectedly, Altegris Futures 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 Altegris Futures will offset losses from the drop in Altegris Futures' long position.

The idea behind Destinations Small Mid Cap and Altegris Futures Evolution 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.