Correlation Between Growth Fund and Rmb Fund
Can any of the company-specific risk be diversified away by investing in both Growth Fund and Rmb Fund 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 Rmb Fund 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 Rmb Fund C, you can compare the effects of market volatilities on Growth Fund and Rmb Fund 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 Rmb Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Fund and Rmb Fund.
Diversification Opportunities for Growth Fund and Rmb Fund
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Growth and Rmb is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Of and Rmb Fund C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rmb Fund C 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 Rmb Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rmb Fund C has no effect on the direction of Growth Fund i.e., Growth Fund and Rmb Fund go up and down completely randomly.
Pair Corralation between Growth Fund and Rmb Fund
Assuming the 90 days horizon Growth Fund Of is expected to generate 1.4 times more return on investment than Rmb Fund. However, Growth Fund is 1.4 times more volatile than Rmb Fund C. It trades about 0.12 of its potential returns per unit of risk. Rmb Fund C is currently generating about 0.1 per unit of risk. If you would invest 7,081 in Growth Fund Of on September 1, 2024 and sell it today you would earn a total of 1,169 from holding Growth Fund Of or generate 16.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Growth Fund Of vs. Rmb Fund C
Performance |
| Timeline |
| Growth Fund |
| Rmb Fund C |
Growth Fund and Rmb Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Fund and Rmb Fund
The main advantage of trading using opposite Growth Fund and Rmb Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Fund position performs unexpectedly, Rmb Fund 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 Rmb Fund will offset losses from the drop in Rmb Fund'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 |
| Rmb Fund vs. Fidelity Advisor Gold | Rmb Fund vs. James Balanced Golden | Rmb Fund vs. Vy Goldman Sachs | Rmb Fund vs. Franklin Gold Precious |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |