Correlation Between Marshfield Concentrated and Acm Dynamic

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

By analyzing existing cross correlation between Marshfield Centrated Opportunity and Acm Dynamic Opportunity, you can compare the effects of market volatilities on Marshfield Concentrated and Acm Dynamic 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 Marshfield Concentrated with a short position of Acm Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marshfield Concentrated and Acm Dynamic.

Diversification Opportunities for Marshfield Concentrated and Acm Dynamic

0.48

Correlation Coefficient

Marshfield Concentrated  Acm Dynamic

Very weak diversification

The 3 months correlation between Marshfield and Acm is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Marshfield Centrated Opportuni and Acm Dynamic Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acm Dynamic Opportunity and Marshfield Concentrated 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 Marshfield Centrated Opportunity are associated (or correlated) with Acm Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acm Dynamic Opportunity has no effect on the direction of Marshfield Concentrated i.e., Marshfield Concentrated and Acm Dynamic go up and down completely randomly.

Pair Corralation between Marshfield Concentrated and Acm Dynamic

Assuming the 90 days horizon Marshfield Centrated Opportunity is expected to generate 0.59 times more return on investment than Acm Dynamic. However, Marshfield Centrated Opportunity is 1.69 times less risky than Acm Dynamic. It trades about 0.1 of its potential returns per unit of risk. Acm Dynamic Opportunity is currently generating about 0.02 per unit of risk. If you would invest  2,366  in Marshfield Centrated Opportunity on October 5, 2024 and sell it today you would earn a total of  800.00  from holding Marshfield Centrated Opportunity or generate 33.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.78%
Values	Daily Returns

Marshfield Centrated Opportuni  vs.  Acm Dynamic Opportunity

Marshfield Concentrated

Risk-Adjusted Performance

0 of 100

Very Weak

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

Acm Dynamic Opportunity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acm Dynamic Opportunity 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 February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Marshfield Concentrated and Acm Dynamic

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

The idea behind Marshfield Centrated Opportunity and Acm Dynamic Opportunity 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.