Correlation Between Altegris Futures and Vy(r) Templeton

Can any of the company-specific risk be diversified away by investing in both Altegris Futures and Vy(r) Templeton 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 Altegris Futures and Vy(r) Templeton into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Altegris Futures Evolution and Vy Templeton Foreign, you can compare the effects of market volatilities on Altegris Futures and Vy(r) Templeton 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 Altegris Futures with a short position of Vy(r) Templeton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altegris Futures and Vy(r) Templeton.

Diversification Opportunities for Altegris Futures and Vy(r) Templeton

-0.93

Correlation Coefficient

Altegris Futures  Vy(r) Templeton

Pay attention - limited upside

The 3 months correlation between Altegris and Vy(r) is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Altegris Futures Evolution and Vy Templeton Foreign in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vy Templeton Foreign and Altegris Futures 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 Altegris Futures Evolution are associated (or correlated) with Vy(r) Templeton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vy Templeton Foreign has no effect on the direction of Altegris Futures i.e., Altegris Futures and Vy(r) Templeton go up and down completely randomly.

Pair Corralation between Altegris Futures and Vy(r) Templeton

Assuming the 90 days horizon Altegris Futures Evolution is expected to under-perform the Vy(r) Templeton. But the mutual fund apears to be less risky and, when comparing its historical volatility, Altegris Futures Evolution is 1.39 times less risky than Vy(r) Templeton. The mutual fund trades about -0.11 of its potential returns per unit of risk. The Vy Templeton Foreign is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest  1,004  in Vy Templeton Foreign on December 22, 2024 and sell it today you would earn a total of  152.00  from holding Vy Templeton Foreign or generate 15.14% return on investment over 90 days.

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

Altegris Futures Evolution  vs.  Vy Templeton Foreign

Altegris Futures Evo

Risk-Adjusted Performance

Very Weak

Over the last 90 days Altegris Futures Evolution has generated negative risk-adjusted returns adding no value to fund investors. 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.

Vy Templeton Foreign

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Vy Templeton Foreign are ranked lower than 28 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Vy(r) Templeton showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Altegris Futures and Vy(r) Templeton

The main advantage of trading using opposite Altegris Futures and Vy(r) Templeton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altegris Futures position performs unexpectedly, Vy(r) Templeton 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 Vy(r) Templeton will offset losses from the drop in Vy(r) Templeton's long position.

The idea behind Altegris Futures Evolution and Vy Templeton Foreign 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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.