Correlation Between Cabana Target and Advisors Inner

Can any of the company-specific risk be diversified away by investing in both Cabana Target and Advisors Inner 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 Cabana Target and Advisors Inner into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cabana Target Drawdown and Advisors Inner Circle, you can compare the effects of market volatilities on Cabana Target and Advisors Inner 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 Cabana Target with a short position of Advisors Inner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cabana Target and Advisors Inner.

Diversification Opportunities for Cabana Target and Advisors Inner

0.81

Correlation Coefficient

Cabana Target  Advisors Inner

Very poor diversification

The 3 months correlation between Cabana and Advisors is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Cabana Target Drawdown and Advisors Inner Circle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advisors Inner Circle and Cabana Target 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 Cabana Target Drawdown are associated (or correlated) with Advisors Inner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advisors Inner Circle has no effect on the direction of Cabana Target i.e., Cabana Target and Advisors Inner go up and down completely randomly.

Pair Corralation between Cabana Target and Advisors Inner

Given the investment horizon of 90 days Cabana Target Drawdown is expected to generate 0.69 times more return on investment than Advisors Inner. However, Cabana Target Drawdown is 1.46 times less risky than Advisors Inner. It trades about 0.19 of its potential returns per unit of risk. Advisors Inner Circle is currently generating about 0.1 per unit of risk. If you would invest  2,182  in Cabana Target Drawdown on May 4, 2025 and sell it today you would earn a total of  68.00  from holding Cabana Target Drawdown or generate 3.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.41%
Values	Daily Returns

Cabana Target Drawdown  vs.  Advisors Inner Circle

Cabana Target Drawdown

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cabana Target Drawdown are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Cabana Target is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Advisors Inner Circle

Risk-Adjusted Performance

OK

Over the last 90 days Advisors Inner Circle has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Advisors Inner is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Cabana Target and Advisors Inner

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

The idea behind Cabana Target Drawdown and Advisors Inner Circle 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.