Correlation Between Alphacentric Global and Alphacentric Hedged

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

By analyzing existing cross correlation between Alphacentric Global Innovations and Alphacentric Hedged Market, you can compare the effects of market volatilities on Alphacentric Global and Alphacentric Hedged 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 Alphacentric Global with a short position of Alphacentric Hedged. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphacentric Global and Alphacentric Hedged.

Diversification Opportunities for Alphacentric Global and Alphacentric Hedged

0.96

Correlation Coefficient

Alphacentric Global  Alphacentric Hedged

Almost no diversification

The 3 months correlation between Alphacentric and Alphacentric is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Alphacentric Global Innovation and Alphacentric Hedged Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alphacentric Hedged and Alphacentric Global 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 Alphacentric Global Innovations are associated (or correlated) with Alphacentric Hedged. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alphacentric Hedged has no effect on the direction of Alphacentric Global i.e., Alphacentric Global and Alphacentric Hedged go up and down completely randomly.

Pair Corralation between Alphacentric Global and Alphacentric Hedged

Assuming the 90 days horizon Alphacentric Global Innovations is expected to under-perform the Alphacentric Hedged. In addition to that, Alphacentric Global is 2.52 times more volatile than Alphacentric Hedged Market. It trades about -0.12 of its total potential returns per unit of risk. Alphacentric Hedged Market is currently generating about -0.1 per unit of volatility. If you would invest  2,859  in Alphacentric Hedged Market on December 31, 2024 and sell it today you would lose (146.00) from holding Alphacentric Hedged Market or give up 5.11% of portfolio value over 90 days.

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

Alphacentric Global Innovation  vs.  Alphacentric Hedged Market

Alphacentric Global

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alphacentric Global Innovations has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in May 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Alphacentric Hedged

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Alphacentric Global and Alphacentric Hedged

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

The idea behind Alphacentric Global Innovations and Alphacentric Hedged Market 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.