Correlation Between Europacific Growth and The Jensen
Can any of the company-specific risk be diversified away by investing in both Europacific Growth and The Jensen 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 Europacific Growth and The Jensen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Europacific Growth Fund and The Jensen Portfolio, you can compare the effects of market volatilities on Europacific Growth and The Jensen 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 Europacific Growth with a short position of The Jensen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europacific Growth and The Jensen.
Diversification Opportunities for Europacific Growth and The Jensen
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Europacific and The is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Europacific Growth Fund and The Jensen Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jensen Portfolio and Europacific Growth 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 Europacific Growth Fund are associated (or correlated) with The Jensen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jensen Portfolio has no effect on the direction of Europacific Growth i.e., Europacific Growth and The Jensen go up and down completely randomly.
Pair Corralation between Europacific Growth and The Jensen
Assuming the 90 days horizon Europacific Growth Fund is expected to generate 0.31 times more return on investment than The Jensen. However, Europacific Growth Fund is 3.27 times less risky than The Jensen. It trades about -0.15 of its potential returns per unit of risk. The Jensen Portfolio is currently generating about -0.15 per unit of risk. If you would invest 5,866 in Europacific Growth Fund on August 29, 2024 and sell it today you would lose (137.00) from holding Europacific Growth Fund or give up 2.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Europacific Growth Fund vs. The Jensen Portfolio
Performance |
| Timeline |
| Europacific Growth |
| Jensen Portfolio |
Europacific Growth and The Jensen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Europacific Growth and The Jensen
The main advantage of trading using opposite Europacific Growth and The Jensen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Europacific Growth position performs unexpectedly, The Jensen 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 The Jensen will offset losses from the drop in The Jensen's long position.| Europacific Growth vs. Aqr Large Cap | Europacific Growth vs. Legg Mason Bw | Europacific Growth vs. Fidelity Stock Selector | Europacific Growth vs. T Rowe Price |
| The Jensen vs. Bond Fund Of | The Jensen vs. Washington Mutual Investors | The Jensen vs. John Hancock Disciplined | The Jensen vs. Europacific Growth Fund |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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