Correlation Between Ontrack E and Hundredfold Select

Can any of the company-specific risk be diversified away by investing in both Ontrack E and Hundredfold Select 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 Ontrack E and Hundredfold Select into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ontrack E Fund and Hundredfold Select Alternative, you can compare the effects of market volatilities on Ontrack E and Hundredfold Select 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 Ontrack E with a short position of Hundredfold Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ontrack E and Hundredfold Select.

Diversification Opportunities for Ontrack E and Hundredfold Select

0.9

Correlation Coefficient

Ontrack E  Hundredfold Select

Almost no diversification

The 3 months correlation between Ontrack and Hundredfold is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Ontrack E Fund and Hundredfold Select Alternative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hundredfold Select and Ontrack E 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 Ontrack E Fund are associated (or correlated) with Hundredfold Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hundredfold Select has no effect on the direction of Ontrack E i.e., Ontrack E and Hundredfold Select go up and down completely randomly.

Pair Corralation between Ontrack E and Hundredfold Select

Assuming the 90 days horizon Ontrack E Fund is expected to under-perform the Hundredfold Select. But the mutual fund apears to be less risky and, when comparing its historical volatility, Ontrack E Fund is 1.54 times less risky than Hundredfold Select. The mutual fund trades about -0.21 of its potential returns per unit of risk. The Hundredfold Select Alternative is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  2,246  in Hundredfold Select Alternative on December 2, 2024 and sell it today you would lose (10.00) from holding Hundredfold Select Alternative or give up 0.45% of portfolio value over 90 days.

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

Ontrack E Fund  vs.  Hundredfold Select Alternative

Ontrack E Fund

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ontrack E Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Ontrack E is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Hundredfold Select

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Ontrack E and Hundredfold Select

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

The idea behind Ontrack E Fund and Hundredfold Select Alternative 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.

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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.