Correlation Between Growth Fund and Transamerica Asset
Can any of the company-specific risk be diversified away by investing in both Growth Fund and Transamerica Asset 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 Transamerica Asset 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 Transamerica Asset Allocation, you can compare the effects of market volatilities on Growth Fund and Transamerica Asset 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 Transamerica Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Fund and Transamerica Asset.
Diversification Opportunities for Growth Fund and Transamerica Asset
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Growth and Transamerica is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Of and Transamerica Asset Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Asset 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 Transamerica Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Asset has no effect on the direction of Growth Fund i.e., Growth Fund and Transamerica Asset go up and down completely randomly.
Pair Corralation between Growth Fund and Transamerica Asset
Assuming the 90 days horizon Growth Fund Of is expected to generate 1.48 times more return on investment than Transamerica Asset. However, Growth Fund is 1.48 times more volatile than Transamerica Asset Allocation. It trades about 0.17 of its potential returns per unit of risk. Transamerica Asset Allocation is currently generating about 0.06 per unit of risk. If you would invest 6,328 in Growth Fund Of on November 3, 2024 and sell it today you would earn a total of 1,503 from holding Growth Fund Of or generate 23.75% 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. Transamerica Asset Allocation
Performance |
| Timeline |
| Growth Fund |
| Transamerica Asset |
Growth Fund and Transamerica Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Fund and Transamerica Asset
The main advantage of trading using opposite Growth Fund and Transamerica Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Fund position performs unexpectedly, Transamerica Asset 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 Transamerica Asset will offset losses from the drop in Transamerica Asset'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 |
| Transamerica Asset vs. Aqr Risk Parity | Transamerica Asset vs. Artisan High Income | Transamerica Asset vs. Chartwell Short Duration | Transamerica Asset vs. Massmutual Premier High |
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 Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |