Correlation Between Balanced Fund and Aston/crosswind Small

Can any of the company-specific risk be diversified away by investing in both Balanced Fund and Aston/crosswind Small 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 Fund and Aston/crosswind Small into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Balanced Fund Investor and Astoncrosswind Small Cap, you can compare the effects of market volatilities on Balanced Fund and Aston/crosswind Small 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 Fund with a short position of Aston/crosswind Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balanced Fund and Aston/crosswind Small.

Diversification Opportunities for Balanced Fund and Aston/crosswind Small

0.76

Correlation Coefficient

Balanced Fund  Aston/crosswind Small

Poor diversification

The 3 months correlation between Balanced and Aston/crosswind is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Fund Investor and Astoncrosswind Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astoncrosswind Small Cap and Balanced Fund 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 Fund Investor are associated (or correlated) with Aston/crosswind Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astoncrosswind Small Cap has no effect on the direction of Balanced Fund i.e., Balanced Fund and Aston/crosswind Small go up and down completely randomly.

Pair Corralation between Balanced Fund and Aston/crosswind Small

Assuming the 90 days horizon Balanced Fund is expected to generate 4.2 times less return on investment than Aston/crosswind Small. But when comparing it to its historical volatility, Balanced Fund Investor is 1.99 times less risky than Aston/crosswind Small. It trades about 0.03 of its potential returns per unit of risk. Astoncrosswind Small Cap is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,710  in Astoncrosswind Small Cap on October 23, 2024 and sell it today you would earn a total of  82.00  from holding Astoncrosswind Small Cap or generate 4.8% return on investment over 90 days.

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

Balanced Fund Investor  vs.  Astoncrosswind Small Cap

Balanced Fund Investor

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Balanced Fund Investor are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Balanced Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Astoncrosswind Small Cap

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Astoncrosswind Small Cap are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Aston/crosswind Small 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 Fund and Aston/crosswind Small

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

The idea behind Balanced Fund Investor and Astoncrosswind Small Cap 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.