Correlation Between Growth Fund and Electronic Control
Can any of the company-specific risk be diversified away by investing in both Growth Fund and Electronic Control 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 Electronic Control 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 Electronic Control Security, you can compare the effects of market volatilities on Growth Fund and Electronic Control 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 Electronic Control. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Fund and Electronic Control.
Diversification Opportunities for Growth Fund and Electronic Control
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Growth and Electronic is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Of and Electronic Control Security in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronic Control 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 Electronic Control. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electronic Control has no effect on the direction of Growth Fund i.e., Growth Fund and Electronic Control go up and down completely randomly.
Pair Corralation between Growth Fund and Electronic Control
Assuming the 90 days horizon Growth Fund is expected to generate 12.83 times less return on investment than Electronic Control. But when comparing it to its historical volatility, Growth Fund Of is 7.77 times less risky than Electronic Control. It trades about 0.14 of its potential returns per unit of risk. Electronic Control Security is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 0.06 in Electronic Control Security on October 24, 2024 and sell it today you would earn a total of 0.02 from holding Electronic Control Security or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Fund Of vs. Electronic Control Security
Performance |
| Timeline |
| Growth Fund |
| Electronic Control |
Growth Fund and Electronic Control Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Fund and Electronic Control
The main advantage of trading using opposite Growth Fund and Electronic Control positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Fund position performs unexpectedly, Electronic Control 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 Electronic Control will offset losses from the drop in Electronic Control'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 |
| Electronic Control vs. Guardforce AI Co | Electronic Control vs. Iveda Solutions | Electronic Control vs. Bridger Aerospace Group | Electronic Control vs. Supercom |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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