Correlation Between Grizzly Short and Ultrashort Latin

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

By analyzing existing cross correlation between Grizzly Short Fund and Ultrashort Latin America, you can compare the effects of market volatilities on Grizzly Short and Ultrashort Latin 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 Grizzly Short with a short position of Ultrashort Latin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grizzly Short and Ultrashort Latin.

Diversification Opportunities for Grizzly Short and Ultrashort Latin

-0.67

Correlation Coefficient

Grizzly Short  Ultrashort Latin

Excellent diversification

The 3 months correlation between Grizzly and Ultrashort is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Grizzly Short Fund and Ultrashort Latin America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultrashort Latin America and Grizzly Short 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 Grizzly Short Fund are associated (or correlated) with Ultrashort Latin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultrashort Latin America has no effect on the direction of Grizzly Short i.e., Grizzly Short and Ultrashort Latin go up and down completely randomly.

Pair Corralation between Grizzly Short and Ultrashort Latin

Assuming the 90 days horizon Grizzly Short is expected to generate 48.24 times less return on investment than Ultrashort Latin. But when comparing it to its historical volatility, Grizzly Short Fund is 2.61 times less risky than Ultrashort Latin. It trades about 0.01 of its potential returns per unit of risk. Ultrashort Latin America is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  4,620  in Ultrashort Latin America on October 9, 2024 and sell it today you would earn a total of  255.00  from holding Ultrashort Latin America or generate 5.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.0%
Values	Daily Returns

Grizzly Short Fund  vs.  Ultrashort Latin America

Grizzly Short

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grizzly Short Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Ultrashort Latin America

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ultrashort Latin America are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Ultrashort Latin showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grizzly Short and Ultrashort Latin

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

The idea behind Grizzly Short Fund and Ultrashort Latin 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 CEOs Directory module to screen CEOs from public companies around the world.