Correlation Between Easterly Snow and Frost Kempner
Can any of the company-specific risk be diversified away by investing in both Easterly Snow and Frost Kempner 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 Easterly Snow and Frost Kempner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Easterly Snow Longshort and Frost Kempner Treasury, you can compare the effects of market volatilities on Easterly Snow and Frost Kempner 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 Easterly Snow with a short position of Frost Kempner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Easterly Snow and Frost Kempner.
Diversification Opportunities for Easterly Snow and Frost Kempner
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Easterly and Frost is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Easterly Snow Longshort and Frost Kempner Treasury in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frost Kempner Treasury and Easterly Snow 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 Easterly Snow Longshort are associated (or correlated) with Frost Kempner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frost Kempner Treasury has no effect on the direction of Easterly Snow i.e., Easterly Snow and Frost Kempner go up and down completely randomly.
Pair Corralation between Easterly Snow and Frost Kempner
Assuming the 90 days horizon Easterly Snow Longshort is expected to under-perform the Frost Kempner. In addition to that, Easterly Snow is 8.49 times more volatile than Frost Kempner Treasury. It trades about -0.04 of its total potential returns per unit of risk. Frost Kempner Treasury is currently generating about 0.02 per unit of volatility. If you would invest 844.00 in Frost Kempner Treasury on September 18, 2024 and sell it today you would earn a total of 1.00 from holding Frost Kempner Treasury or generate 0.12% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Easterly Snow Longshort vs. Frost Kempner Treasury
Performance |
Timeline |
Easterly Snow Longshort |
Frost Kempner Treasury |
Easterly Snow and Frost Kempner Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Easterly Snow and Frost Kempner
The main advantage of trading using opposite Easterly Snow and Frost Kempner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Easterly Snow position performs unexpectedly, Frost Kempner 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 Frost Kempner will offset losses from the drop in Frost Kempner's long position.Easterly Snow vs. Easterly Snow Small | Easterly Snow vs. Vanguard Windsor Fund | Easterly Snow vs. Pimco Dynamic Income | Easterly Snow vs. Fidelity Magellan Fund |
Frost Kempner vs. Prudential Short Duration | Frost Kempner vs. Siit Ultra Short | Frost Kempner vs. Easterly Snow Longshort | Frost Kempner vs. Lord Abbett Short |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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