Correlation Between Hood River and Asg Global

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

By analyzing existing cross correlation between Hood River Small Cap and Asg Global Alternatives, you can compare the effects of market volatilities on Hood River and Asg Global 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 Hood River with a short position of Asg Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hood River and Asg Global.

Diversification Opportunities for Hood River and Asg Global

0.4

Correlation Coefficient

Hood River  Asg Global

Very weak diversification

The 3 months correlation between Hood and Asg is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Hood River Small Cap and Asg Global Alternatives in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asg Global Alternatives and Hood River 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 Hood River Small Cap are associated (or correlated) with Asg Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asg Global Alternatives has no effect on the direction of Hood River i.e., Hood River and Asg Global go up and down completely randomly.

Pair Corralation between Hood River and Asg Global

Assuming the 90 days horizon Hood River Small Cap is expected to generate 3.3 times more return on investment than Asg Global. However, Hood River is 3.3 times more volatile than Asg Global Alternatives. It trades about 0.23 of its potential returns per unit of risk. Asg Global Alternatives is currently generating about 0.4 per unit of risk. If you would invest  7,531  in Hood River Small Cap on October 23, 2024 and sell it today you would earn a total of  333.00  from holding Hood River Small Cap or generate 4.42% return on investment over 90 days.

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

Hood River Small Cap  vs.  Asg Global Alternatives

Hood River Small

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hood River Small Cap are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Hood River is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Asg Global Alternatives

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Asg Global Alternatives are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Asg Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hood River and Asg Global

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

The idea behind Hood River Small Cap and Asg Global Alternatives 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.