Correlation Between Equinox Chesapeake and Mutual Of

Can any of the company-specific risk be diversified away by investing in both Equinox Chesapeake and Mutual Of 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 Equinox Chesapeake and Mutual Of into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Equinox Chesapeake Strategy and Mutual Of America, you can compare the effects of market volatilities on Equinox Chesapeake and Mutual Of 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 Equinox Chesapeake with a short position of Mutual Of. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equinox Chesapeake and Mutual Of.

Diversification Opportunities for Equinox Chesapeake and Mutual Of

-0.42

Correlation Coefficient

Equinox Chesapeake  Mutual Of

Very good diversification

The 3 months correlation between Equinox and Mutual is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Equinox Chesapeake Strategy and Mutual Of America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mutual Of America and Equinox Chesapeake 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 Equinox Chesapeake Strategy are associated (or correlated) with Mutual Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mutual Of America has no effect on the direction of Equinox Chesapeake i.e., Equinox Chesapeake and Mutual Of go up and down completely randomly.

Pair Corralation between Equinox Chesapeake and Mutual Of

Assuming the 90 days horizon Equinox Chesapeake Strategy is expected to under-perform the Mutual Of. But the mutual fund apears to be less risky and, when comparing its historical volatility, Equinox Chesapeake Strategy is 1.67 times less risky than Mutual Of. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Mutual Of America is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,411  in Mutual Of America on October 23, 2024 and sell it today you would earn a total of  67.00  from holding Mutual Of America or generate 4.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.99%
Values	Daily Returns

Equinox Chesapeake Strategy  vs.  Mutual Of America

Equinox Chesapeake

Risk-Adjusted Performance

0 of 100

Very Weak

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

Mutual Of America

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mutual Of America has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward-looking signals, Mutual Of is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Equinox Chesapeake and Mutual Of

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

The idea behind Equinox Chesapeake Strategy and Mutual Of America 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.