Correlation Between Growth Fund and Euro Tech

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Can any of the company-specific risk be diversified away by investing in both Growth Fund and Euro Tech 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 Growth Fund and Euro Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Fund Of and Euro Tech Holdings, you can compare the effects of market volatilities on Growth Fund and Euro Tech 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 Growth Fund with a short position of Euro Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Fund and Euro Tech.

Diversification Opportunities for Growth Fund and Euro Tech

-0.72
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Growth and Euro is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Of and Euro Tech Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Euro Tech Holdings and Growth Fund 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 Growth Fund Of are associated (or correlated) with Euro Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Euro Tech Holdings has no effect on the direction of Growth Fund i.e., Growth Fund and Euro Tech go up and down completely randomly.

Pair Corralation between Growth Fund and Euro Tech

Assuming the 90 days horizon Growth Fund Of is expected to generate 0.53 times more return on investment than Euro Tech. However, Growth Fund Of is 1.88 times less risky than Euro Tech. It trades about 0.24 of its potential returns per unit of risk. Euro Tech Holdings is currently generating about -0.14 per unit of risk. If you would invest  7,457  in Growth Fund Of on November 3, 2024 and sell it today you would earn a total of  374.00  from holding Growth Fund Of or generate 5.02% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Growth Fund Of  vs.  Euro Tech Holdings

 Performance 
       Timeline  
Growth Fund 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Growth Fund Of are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical indicators, Growth Fund may actually be approaching a critical reversion point that can send shares even higher in March 2025.
Euro Tech Holdings 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Euro Tech Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Growth Fund and Euro Tech Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Growth Fund and Euro Tech

The main advantage of trading using opposite Growth Fund and Euro Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Fund position performs unexpectedly, Euro Tech 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 Euro Tech will offset losses from the drop in Euro Tech's long position.
The idea behind Growth Fund Of and Euro Tech Holdings 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.

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