Correlation Between Akre Focus and Global Opportunity
Can any of the company-specific risk be diversified away by investing in both Akre Focus and Global Opportunity 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 Global Opportunity 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 Global Opportunity Portfolio, you can compare the effects of market volatilities on Akre Focus and Global Opportunity 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 Global Opportunity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akre Focus and Global Opportunity.
Diversification Opportunities for Akre Focus and Global Opportunity
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Akre and Global is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Akre Focus Fund and Global Opportunity Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Opportunity 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 Global Opportunity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Opportunity has no effect on the direction of Akre Focus i.e., Akre Focus and Global Opportunity go up and down completely randomly.
Pair Corralation between Akre Focus and Global Opportunity
Assuming the 90 days horizon Akre Focus Fund is expected to generate 1.06 times more return on investment than Global Opportunity. However, Akre Focus is 1.06 times more volatile than Global Opportunity Portfolio. It trades about 0.56 of its potential returns per unit of risk. Global Opportunity Portfolio is currently generating about 0.43 per unit of risk. If you would invest 6,936 in Akre Focus Fund on September 1, 2024 and sell it today you would earn a total of 579.00 from holding Akre Focus Fund or generate 8.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Akre Focus Fund vs. Global Opportunity Portfolio
Performance |
| Timeline |
| Akre Focus Fund |
| Global Opportunity |
Akre Focus and Global Opportunity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akre Focus and Global Opportunity
The main advantage of trading using opposite Akre Focus and Global Opportunity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akre Focus position performs unexpectedly, Global Opportunity 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 Global Opportunity will offset losses from the drop in Global Opportunity's long position.| Akre Focus vs. Osterweis Strategic Income | Akre Focus vs. Doubleline Low Duration | Akre Focus vs. Doubleline Total Return | Akre Focus vs. Vanguard Dividend Growth |
| Global Opportunity vs. Morgan Stanley Multi | Global Opportunity vs. Growth Portfolio Class | Global Opportunity vs. Morgan Stanley Insti | Global Opportunity vs. Virtus Kar Small Cap |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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