Correlation Between Growth Fund and Fuse Group
Can any of the company-specific risk be diversified away by investing in both Growth Fund and Fuse Group 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 Fuse Group 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 Fuse Group Holding, you can compare the effects of market volatilities on Growth Fund and Fuse Group 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 Fuse Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Fund and Fuse Group.
Diversification Opportunities for Growth Fund and Fuse Group
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Growth and Fuse is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Of and Fuse Group Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuse Group Holding 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 Fuse Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuse Group Holding has no effect on the direction of Growth Fund i.e., Growth Fund and Fuse Group go up and down completely randomly.
Pair Corralation between Growth Fund and Fuse Group
Assuming the 90 days horizon Growth Fund is expected to generate 16.3 times less return on investment than Fuse Group. But when comparing it to its historical volatility, Growth Fund Of is 23.86 times less risky than Fuse Group. It trades about 0.17 of its potential returns per unit of risk. Fuse Group Holding is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 39.00 in Fuse Group Holding on November 3, 2024 and sell it today you would earn a total of 21.00 from holding Fuse Group Holding or generate 53.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Fund Of vs. Fuse Group Holding
Performance |
| Timeline |
| Growth Fund |
| Fuse Group Holding |
Growth Fund and Fuse Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Fund and Fuse Group
The main advantage of trading using opposite Growth Fund and Fuse Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Fund position performs unexpectedly, Fuse Group 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 Fuse Group will offset losses from the drop in Fuse Group'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 |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |