Correlation Between Alphacentric Symmetry and Growth Income

Can any of the company-specific risk be diversified away by investing in both Alphacentric Symmetry and Growth Income 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 Alphacentric Symmetry and Growth Income into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Alphacentric Symmetry and Growth Income

0.38

Correlation Coefficient

Alphacentric Symmetry  Growth Income

Weak diversification

The 3 months correlation between Alphacentric and Growth is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Alphacentric Symmetry Strategy and Growth Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Income and Alphacentric Symmetry 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 Alphacentric Symmetry Strategy are associated (or correlated) with Growth Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Income has no effect on the direction of Alphacentric Symmetry i.e., Alphacentric Symmetry and Growth Income go up and down completely randomly.

Pair Corralation between Alphacentric Symmetry and Growth Income

Assuming the 90 days horizon Alphacentric Symmetry Strategy is expected to generate 0.24 times more return on investment than Growth Income. However, Alphacentric Symmetry Strategy is 4.2 times less risky than Growth Income. It trades about 0.06 of its potential returns per unit of risk. Growth Income Fund is currently generating about -0.09 per unit of risk. If you would invest  1,222  in Alphacentric Symmetry Strategy on October 24, 2024 and sell it today you would earn a total of  22.00  from holding Alphacentric Symmetry Strategy or generate 1.8% return on investment over 90 days.

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

Alphacentric Symmetry Strategy  vs.  Growth Income Fund

Alphacentric Symmetry

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Alphacentric Symmetry Strategy are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Alphacentric Symmetry is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Growth Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Growth Income Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Alphacentric Symmetry and Growth Income

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

The idea behind Alphacentric Symmetry Strategy and Growth Income Fund 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.