Correlation Between Altegris Futures and 1919 Financial

Can any of the company-specific risk be diversified away by investing in both Altegris Futures and 1919 Financial 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 1919 Financial 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 1919 Financial Services, you can compare the effects of market volatilities on Altegris Futures and 1919 Financial 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 1919 Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altegris Futures and 1919 Financial.

Diversification Opportunities for Altegris Futures and 1919 Financial

-0.46

Correlation Coefficient

Altegris Futures  1919 Financial

Very good diversification

The 3 months correlation between Altegris and 1919 is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Altegris Futures Evolution and 1919 Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1919 Financial Services 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 1919 Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1919 Financial Services has no effect on the direction of Altegris Futures i.e., Altegris Futures and 1919 Financial go up and down completely randomly.

Pair Corralation between Altegris Futures and 1919 Financial

Assuming the 90 days horizon Altegris Futures Evolution is expected to generate 0.34 times more return on investment than 1919 Financial. However, Altegris Futures Evolution is 2.9 times less risky than 1919 Financial. It trades about -0.08 of its potential returns per unit of risk. 1919 Financial Services is currently generating about -0.24 per unit of risk. If you would invest  674.00  in Altegris Futures Evolution on September 20, 2024 and sell it today you would lose (9.00) from holding Altegris Futures Evolution or give up 1.34% of portfolio value over 90 days.

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

Altegris Futures Evolution  vs.  1919 Financial Services

Altegris Futures Evo

Risk-Adjusted Performance

0 of 100

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 latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

1919 Financial Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 1919 Financial Services has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, 1919 Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Altegris Futures and 1919 Financial

The main advantage of trading using opposite Altegris Futures and 1919 Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altegris Futures position performs unexpectedly, 1919 Financial 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 1919 Financial will offset losses from the drop in 1919 Financial's long position.

The idea behind Altegris Futures Evolution and 1919 Financial Services 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.

Check out your portfolio center.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.