Correlation Between Akre Focus and Schwab Health
Can any of the company-specific risk be diversified away by investing in both Akre Focus and Schwab Health 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 Akre Focus and Schwab Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akre Focus Fund and Schwab Health Care, you can compare the effects of market volatilities on Akre Focus and Schwab Health 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 Akre Focus with a short position of Schwab Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akre Focus and Schwab Health.
Diversification Opportunities for Akre Focus and Schwab Health
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Akre and Schwab is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Akre Focus Fund and Schwab Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schwab Health Care and Akre Focus 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 Akre Focus Fund are associated (or correlated) with Schwab Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schwab Health Care has no effect on the direction of Akre Focus i.e., Akre Focus and Schwab Health go up and down completely randomly.
Pair Corralation between Akre Focus and Schwab Health
Assuming the 90 days horizon Akre Focus Fund is expected to generate 1.26 times more return on investment than Schwab Health. However, Akre Focus is 1.26 times more volatile than Schwab Health Care. It trades about 0.1 of its potential returns per unit of risk. Schwab Health Care is currently generating about 0.0 per unit of risk. If you would invest 4,703 in Akre Focus Fund on August 30, 2024 and sell it today you would earn a total of 2,480 from holding Akre Focus Fund or generate 52.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Akre Focus Fund vs. Schwab Health Care
Performance |
| Timeline |
| Akre Focus Fund |
| Schwab Health Care |
Akre Focus and Schwab Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akre Focus and Schwab Health
The main advantage of trading using opposite Akre Focus and Schwab Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akre Focus position performs unexpectedly, Schwab Health 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 Schwab Health will offset losses from the drop in Schwab Health's long position.| Akre Focus vs. Osterweis Strategic Income | Akre Focus vs. Doubleline Low Duration | Akre Focus vs. Doubleline Total Return | Akre Focus vs. Primecap Odyssey Growth |
| Schwab Health vs. Fidelity Advisor Technology | Schwab Health vs. Fidelity Advisor Biotechnology | Schwab Health vs. Fidelity Advisor Financial | Schwab Health vs. Fidelity Advisor Utilities |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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