Correlation Between ClearShares OCIO and Akros Monthly

Can any of the company-specific risk be diversified away by investing in both ClearShares OCIO and Akros Monthly 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 ClearShares OCIO and Akros Monthly into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ClearShares OCIO ETF and Akros Monthly Payout, you can compare the effects of market volatilities on ClearShares OCIO and Akros Monthly 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 ClearShares OCIO with a short position of Akros Monthly. Check out your portfolio center. Please also check ongoing floating volatility patterns of ClearShares OCIO and Akros Monthly.

Diversification Opportunities for ClearShares OCIO and Akros Monthly

0.97

Correlation Coefficient

ClearShares OCIO  Akros Monthly

Almost no diversification

The 3 months correlation between ClearShares and Akros is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding ClearShares OCIO ETF and Akros Monthly Payout in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akros Monthly Payout and ClearShares OCIO 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 ClearShares OCIO ETF are associated (or correlated) with Akros Monthly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akros Monthly Payout has no effect on the direction of ClearShares OCIO i.e., ClearShares OCIO and Akros Monthly go up and down completely randomly.

Pair Corralation between ClearShares OCIO and Akros Monthly

Given the investment horizon of 90 days ClearShares OCIO ETF is expected to under-perform the Akros Monthly. But the etf apears to be less risky and, when comparing its historical volatility, ClearShares OCIO ETF is 1.26 times less risky than Akros Monthly. The etf trades about -0.05 of its potential returns per unit of risk. The Akros Monthly Payout is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  2,519  in Akros Monthly Payout on December 30, 2024 and sell it today you would lose (67.00) from holding Akros Monthly Payout or give up 2.66% of portfolio value over 90 days.

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

ClearShares OCIO ETF  vs.  Akros Monthly Payout

ClearShares OCIO ETF

Risk-Adjusted Performance

Very Weak

Over the last 90 days ClearShares OCIO ETF has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, ClearShares OCIO is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Akros Monthly Payout

Risk-Adjusted Performance

Very Weak

Over the last 90 days Akros Monthly Payout has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Akros Monthly is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ClearShares OCIO and Akros Monthly

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

The idea behind ClearShares OCIO ETF and Akros Monthly Payout 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.