Correlation Between Alphacentric Symmetry and Vanguard Multi-sector

Can any of the company-specific risk be diversified away by investing in both Alphacentric Symmetry and Vanguard Multi-sector 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 Vanguard Multi-sector 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 Vanguard Multi Sector Income, you can compare the effects of market volatilities on Alphacentric Symmetry and Vanguard Multi-sector 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 Vanguard Multi-sector. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphacentric Symmetry and Vanguard Multi-sector.

Diversification Opportunities for Alphacentric Symmetry and Vanguard Multi-sector

-0.45

Correlation Coefficient

Alphacentric Symmetry  Vanguard Multi-sector

Very good diversification

The 3 months correlation between Alphacentric and Vanguard is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Alphacentric Symmetry Strategy and Vanguard Multi Sector Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Multi Sector 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 Vanguard Multi-sector. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Multi Sector has no effect on the direction of Alphacentric Symmetry i.e., Alphacentric Symmetry and Vanguard Multi-sector go up and down completely randomly.

Pair Corralation between Alphacentric Symmetry and Vanguard Multi-sector

Assuming the 90 days horizon Alphacentric Symmetry Strategy is expected to under-perform the Vanguard Multi-sector. In addition to that, Alphacentric Symmetry is 3.12 times more volatile than Vanguard Multi Sector Income. It trades about -0.11 of its total potential returns per unit of risk. Vanguard Multi Sector Income is currently generating about 0.21 per unit of volatility. If you would invest  1,777  in Vanguard Multi Sector Income on December 23, 2024 and sell it today you would earn a total of  39.00  from holding Vanguard Multi Sector Income or generate 2.19% return on investment over 90 days.

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

Alphacentric Symmetry Strategy  vs.  Vanguard Multi Sector Income

Alphacentric Symmetry

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alphacentric Symmetry Strategy has generated negative risk-adjusted returns adding no value to fund investors. 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.

Vanguard Multi Sector

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Multi Sector Income are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Vanguard Multi-sector is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Alphacentric Symmetry and Vanguard Multi-sector

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

The idea behind Alphacentric Symmetry Strategy and Vanguard Multi Sector 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.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.