Correlation Between Growth Fund and CSL
Can any of the company-specific risk be diversified away by investing in both Growth Fund and CSL 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 CSL 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 CSL, you can compare the effects of market volatilities on Growth Fund and CSL 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 CSL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Fund and CSL.
Diversification Opportunities for Growth Fund and CSL
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Growth and CSL is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Of and CSL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSL 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 CSL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSL has no effect on the direction of Growth Fund i.e., Growth Fund and CSL go up and down completely randomly.
Pair Corralation between Growth Fund and CSL
Assuming the 90 days horizon Growth Fund Of is expected to generate 1.01 times more return on investment than CSL. However, Growth Fund is 1.01 times more volatile than CSL. It trades about 0.14 of its potential returns per unit of risk. CSL is currently generating about -0.12 per unit of risk. If you would invest 7,594 in Growth Fund Of on October 24, 2024 and sell it today you would earn a total of 193.00 from holding Growth Fund Of or generate 2.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Fund Of vs. CSL
Performance |
| Timeline |
| Growth Fund |
| CSL |
Growth Fund and CSL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Fund and CSL
The main advantage of trading using opposite Growth Fund and CSL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Fund position performs unexpectedly, CSL 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 CSL will offset losses from the drop in CSL's long position.| Growth Fund vs. Capital World Growth | Growth Fund vs. Europacific Growth Fund | Growth Fund vs. New Perspective Fund | Growth Fund vs. Investment Of America |
| CSL vs. Novo Nordisk AS | CSL vs. ACELYRIN, INC Common | CSL vs. Caribou Biosciences | CSL vs. Molecular Partners AG |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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