Correlation Between Arrow Managed and American Funds
Can any of the company-specific risk be diversified away by investing in both Arrow Managed and American Funds 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 Arrow Managed and American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow Managed Futures and American Funds 2055, you can compare the effects of market volatilities on Arrow Managed and American Funds 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 Arrow Managed with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Managed and American Funds.
Diversification Opportunities for Arrow Managed and American Funds
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Arrow and American is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Managed Futures and American Funds 2055 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds 2055 and Arrow Managed 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 Arrow Managed Futures are associated (or correlated) with American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds 2055 has no effect on the direction of Arrow Managed i.e., Arrow Managed and American Funds go up and down completely randomly.
Pair Corralation between Arrow Managed and American Funds
Assuming the 90 days horizon Arrow Managed Futures is expected to generate 1.99 times more return on investment than American Funds. However, Arrow Managed is 1.99 times more volatile than American Funds 2055. It trades about 0.02 of its potential returns per unit of risk. American Funds 2055 is currently generating about -0.09 per unit of risk. If you would invest 570.00 in Arrow Managed Futures on December 4, 2024 and sell it today you would earn a total of 5.00 from holding Arrow Managed Futures or generate 0.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.33% |
Values | Daily Returns |
Arrow Managed Futures vs. American Funds 2055
Performance |
Timeline |
Arrow Managed Futures |
American Funds 2055 |
Arrow Managed and American Funds Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Arrow Managed and American Funds
The main advantage of trading using opposite Arrow Managed and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Managed position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' long position.Arrow Managed vs. The Hartford Inflation | Arrow Managed vs. Ab Bond Inflation | Arrow Managed vs. Cref Inflation Linked Bond | Arrow Managed vs. Ab Bond Inflation |
American Funds vs. Rbc Impact Bond | American Funds vs. Versatile Bond Portfolio | American Funds vs. Nationwide Bond Index | American Funds vs. Goldman Sachs Bond |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |