Correlation Between Balanced Strategy and Acm Tactical

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

By analyzing existing cross correlation between Balanced Strategy Fund and Acm Tactical Income, you can compare the effects of market volatilities on Balanced Strategy and Acm Tactical 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 Balanced Strategy with a short position of Acm Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balanced Strategy and Acm Tactical.

Diversification Opportunities for Balanced Strategy and Acm Tactical

0.53

Correlation Coefficient

Balanced Strategy  Acm Tactical

Very weak diversification

The 3 months correlation between Balanced and Acm is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Strategy Fund and Acm Tactical Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acm Tactical Income and Balanced Strategy 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 Balanced Strategy Fund are associated (or correlated) with Acm Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acm Tactical Income has no effect on the direction of Balanced Strategy i.e., Balanced Strategy and Acm Tactical go up and down completely randomly.

Pair Corralation between Balanced Strategy and Acm Tactical

Assuming the 90 days horizon Balanced Strategy is expected to generate 9.19 times less return on investment than Acm Tactical. In addition to that, Balanced Strategy is 3.05 times more volatile than Acm Tactical Income. It trades about 0.0 of its total potential returns per unit of risk. Acm Tactical Income is currently generating about 0.08 per unit of volatility. If you would invest  879.00  in Acm Tactical Income on October 26, 2024 and sell it today you would earn a total of  5.00  from holding Acm Tactical Income or generate 0.57% return on investment over 90 days.

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

Balanced Strategy Fund  vs.  Acm Tactical Income

Balanced Strategy

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Balanced Strategy Fund are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Balanced Strategy is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Acm Tactical Income

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Acm Tactical Income are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Acm Tactical is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Balanced Strategy and Acm Tactical

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

The idea behind Balanced Strategy Fund and Acm Tactical Income 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.