Correlation Between Altus Power and Optimum Fixed

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Can any of the company-specific risk be diversified away by investing in both Altus Power and Optimum Fixed 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 Altus Power and Optimum Fixed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altus Power and Optimum Fixed Income, you can compare the effects of market volatilities on Altus Power and Optimum Fixed 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 Altus Power with a short position of Optimum Fixed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altus Power and Optimum Fixed.

Diversification Opportunities for Altus Power and Optimum Fixed

0.32
  Correlation Coefficient

Weak diversification

The 3 months correlation between Altus and Optimum is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Altus Power and Optimum Fixed Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optimum Fixed Income and Altus Power 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 Altus Power are associated (or correlated) with Optimum Fixed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optimum Fixed Income has no effect on the direction of Altus Power i.e., Altus Power and Optimum Fixed go up and down completely randomly.

Pair Corralation between Altus Power and Optimum Fixed

Given the investment horizon of 90 days Altus Power is expected to generate 11.29 times more return on investment than Optimum Fixed. However, Altus Power is 11.29 times more volatile than Optimum Fixed Income. It trades about -0.01 of its potential returns per unit of risk. Optimum Fixed Income is currently generating about -0.14 per unit of risk. If you would invest  1,001  in Altus Power on August 29, 2022 and sell it today you would lose (317.00)  from holding Altus Power or give up 31.67% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Altus Power  vs.  Optimum Fixed Income

 Performance (%) 
       Timeline  
Altus Power 
Altus Performance
0 of 100
Over the last 90 days Altus Power has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Etf's basic indicators remain relatively invariable which may send shares a bit higher in December 2022. The latest agitation may also be a sign of long-running up-swing for the ETF retail investors.

Altus Price Channel

Optimum Fixed Income 
Optimum Performance
0 of 100
Over the last 90 days Optimum Fixed Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Optimum Fixed is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Optimum Price Channel

Altus Power and Optimum Fixed Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Altus Power and Optimum Fixed

The main advantage of trading using opposite Altus Power and Optimum Fixed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altus Power position performs unexpectedly, Optimum Fixed 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 Optimum Fixed will offset losses from the drop in Optimum Fixed's long position.
Altus Power vs. FTSE Developed Markets
Altus Power vs. Midcap ETF Vanguard
Altus Power vs. Vanguard Growth ETF
Altus Power vs. Smallcap ETF Vanguard
The idea behind Altus Power and Optimum Fixed 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.
Optimum Fixed vs. Pimco Total Return
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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