Correlation Between Adams Diversified and Al Frank
Can any of the company-specific risk be diversified away by investing in both Adams Diversified and Al Frank 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 Adams Diversified and Al Frank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adams Diversified Equity and Al Frank Fund, you can compare the effects of market volatilities on Adams Diversified and Al Frank 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 Adams Diversified with a short position of Al Frank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adams Diversified and Al Frank.
Diversification Opportunities for Adams Diversified and Al Frank
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Adams and VALAX is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Adams Diversified Equity and Al Frank Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Al Frank Fund and Adams Diversified 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 Adams Diversified Equity are associated (or correlated) with Al Frank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Al Frank Fund has no effect on the direction of Adams Diversified i.e., Adams Diversified and Al Frank go up and down completely randomly.
Pair Corralation between Adams Diversified and Al Frank
Considering the 90-day investment horizon Adams Diversified Equity is expected to generate 0.91 times more return on investment than Al Frank. However, Adams Diversified Equity is 1.1 times less risky than Al Frank. It trades about 0.36 of its potential returns per unit of risk. Al Frank Fund is currently generating about 0.3 per unit of risk. If you would invest 1,847 in Adams Diversified Equity on April 30, 2025 and sell it today you would earn a total of 335.00 from holding Adams Diversified Equity or generate 18.14% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 98.39% |
Values | Daily Returns |
Adams Diversified Equity vs. Al Frank Fund
Performance |
Timeline |
Adams Diversified Equity |
Al Frank Fund |
Risk-Adjusted Performance
Solid
Weak | Strong |
Adams Diversified and Al Frank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Adams Diversified and Al Frank
The main advantage of trading using opposite Adams Diversified and Al Frank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adams Diversified position performs unexpectedly, Al Frank 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 Al Frank will offset losses from the drop in Al Frank's long position.Adams Diversified vs. Adams Natural Resources | Adams Diversified vs. Liberty All Star | Adams Diversified vs. Tri Continental Closed | Adams Diversified vs. Royce Value Closed |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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