Correlation Between Alphacentric Hedged and Science Technology

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

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

Diversification Opportunities for Alphacentric Hedged and Science Technology

0.96

Correlation Coefficient

Alphacentric Hedged  Science Technology

Almost no diversification

The 3 months correlation between Alphacentric and Science is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Alphacentric Hedged Market and Science Technology Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Science Technology and Alphacentric Hedged 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 Hedged Market are associated (or correlated) with Science Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Science Technology has no effect on the direction of Alphacentric Hedged i.e., Alphacentric Hedged and Science Technology go up and down completely randomly.

Pair Corralation between Alphacentric Hedged and Science Technology

Assuming the 90 days horizon Alphacentric Hedged is expected to generate 2.2 times less return on investment than Science Technology. But when comparing it to its historical volatility, Alphacentric Hedged Market is 1.8 times less risky than Science Technology. It trades about 0.22 of its potential returns per unit of risk. Science Technology Fund is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  3,098  in Science Technology Fund on May 8, 2025 and sell it today you would earn a total of  611.00  from holding Science Technology Fund or generate 19.72% return on investment over 90 days.

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

Alphacentric Hedged Market  vs.  Science Technology Fund

Alphacentric Hedged

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Alphacentric Hedged Market are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Alphacentric Hedged may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Science Technology

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Science Technology Fund are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Science Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alphacentric Hedged and Science Technology

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

The idea behind Alphacentric Hedged Market and Science Technology 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.

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 Transaction History module to view history of all your transactions and understand their impact on performance.