Correlation Between Aristotle Growth and Aristotle Funds
Can any of the company-specific risk be diversified away by investing in both Aristotle Growth and Aristotle Funds 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 Aristotle Growth and Aristotle Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aristotle Growth Equity and Aristotle Funds Series, you can compare the effects of market volatilities on Aristotle Growth and Aristotle Funds 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 Aristotle Growth with a short position of Aristotle Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aristotle Growth and Aristotle Funds.
Diversification Opportunities for Aristotle Growth and Aristotle Funds
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Aristotle and Aristotle is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Aristotle Growth Equity and Aristotle Funds Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aristotle Funds Series and Aristotle Growth 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 Aristotle Growth Equity are associated (or correlated) with Aristotle Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aristotle Funds Series has no effect on the direction of Aristotle Growth i.e., Aristotle Growth and Aristotle Funds go up and down completely randomly.
Pair Corralation between Aristotle Growth and Aristotle Funds
Assuming the 90 days horizon Aristotle Growth is expected to generate 1.26 times less return on investment than Aristotle Funds. In addition to that, Aristotle Growth is 1.26 times more volatile than Aristotle Funds Series. It trades about 0.1 of its total potential returns per unit of risk. Aristotle Funds Series is currently generating about 0.16 per unit of volatility. If you would invest 976.00 in Aristotle Funds Series on August 26, 2024 and sell it today you would earn a total of 462.00 from holding Aristotle Funds Series or generate 47.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 79.56% |
| Values | Daily Returns |
Aristotle Growth Equity vs. Aristotle Funds Series
Performance |
| Timeline |
| Aristotle Growth Equity |
| Aristotle Funds Series |
Aristotle Growth and Aristotle Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aristotle Growth and Aristotle Funds
The main advantage of trading using opposite Aristotle Growth and Aristotle Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aristotle Growth position performs unexpectedly, Aristotle Funds 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 Aristotle Funds will offset losses from the drop in Aristotle Funds' long position.| Aristotle Growth vs. Aristotle Funds Series | Aristotle Growth vs. Aristotle Funds Series | Aristotle Growth vs. Aristotle International Eq | Aristotle Growth vs. Aristotle Funds Series |
| Aristotle Funds vs. Aristotle Funds Series | Aristotle Funds vs. Aristotle International Eq | Aristotle Funds vs. Aristotle Funds Series | Aristotle Funds vs. Aristotle Funds Series |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |