Correlation Between Natural Alternatives and Silvercrest Asset

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

By analyzing existing cross correlation between Natural Alternatives International and Silvercrest Asset Management, you can compare the effects of market volatilities on Natural Alternatives and Silvercrest Asset 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 Natural Alternatives with a short position of Silvercrest Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Alternatives and Silvercrest Asset.

Diversification Opportunities for Natural Alternatives and Silvercrest Asset

-0.62

Correlation Coefficient

Natural Alternatives  Silvercrest Asset

Excellent diversification

The 3 months correlation between Natural and Silvercrest is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Natural Alternatives Internati and Silvercrest Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silvercrest Asset and Natural Alternatives 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 Natural Alternatives International are associated (or correlated) with Silvercrest Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silvercrest Asset has no effect on the direction of Natural Alternatives i.e., Natural Alternatives and Silvercrest Asset go up and down completely randomly.

Pair Corralation between Natural Alternatives and Silvercrest Asset

Given the investment horizon of 90 days Natural Alternatives International is expected to under-perform the Silvercrest Asset. In addition to that, Natural Alternatives is 1.46 times more volatile than Silvercrest Asset Management. It trades about -0.03 of its total potential returns per unit of risk. Silvercrest Asset Management is currently generating about 0.04 per unit of volatility. If you would invest  1,589  in Silvercrest Asset Management on October 7, 2024 and sell it today you would earn a total of  239.00  from holding Silvercrest Asset Management or generate 15.04% return on investment over 90 days.

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

Natural Alternatives Internati  vs.  Silvercrest Asset Management

Natural Alternatives

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Natural Alternatives International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Natural Alternatives is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Silvercrest Asset

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Silvercrest Asset Management are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak primary indicators, Silvercrest Asset may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Natural Alternatives and Silvercrest Asset

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

The idea behind Natural Alternatives International and Silvercrest Asset Management 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.