Correlation Between Global Gold and Eic Value
Can any of the company-specific risk be diversified away by investing in both Global Gold and Eic Value 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 Global Gold and Eic Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Gold Fund and Eic Value Fund, you can compare the effects of market volatilities on Global Gold and Eic Value 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 Global Gold with a short position of Eic Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Gold and Eic Value.
Diversification Opportunities for Global Gold and Eic Value
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and Eic is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Global Gold Fund and Eic Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eic Value Fund and Global Gold 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 Global Gold Fund are associated (or correlated) with Eic Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eic Value Fund has no effect on the direction of Global Gold i.e., Global Gold and Eic Value go up and down completely randomly.
Pair Corralation between Global Gold and Eic Value
Assuming the 90 days horizon Global Gold Fund is expected to generate 1.61 times more return on investment than Eic Value. However, Global Gold is 1.61 times more volatile than Eic Value Fund. It trades about 0.02 of its potential returns per unit of risk. Eic Value Fund is currently generating about -0.08 per unit of risk. If you would invest 1,325 in Global Gold Fund on November 6, 2024 and sell it today you would earn a total of 12.00 from holding Global Gold Fund or generate 0.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Gold Fund vs. Eic Value Fund
Performance |
| Timeline |
| Global Gold Fund |
| Eic Value Fund |
Global Gold and Eic Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Gold and Eic Value
The main advantage of trading using opposite Global Gold and Eic Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Gold position performs unexpectedly, Eic Value 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 Eic Value will offset losses from the drop in Eic Value's long position.| Global Gold vs. Massmutual Premier High | Global Gold vs. T Rowe Price | Global Gold vs. Artisan High Income | Global Gold vs. Pace High Yield |
| Eic Value vs. Davis Government Bond | Eic Value vs. Payden Government Fund | Eic Value vs. Dunham Porategovernment Bond | Eic Value vs. Wesmark Government Bond |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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