Correlation Between New Perspective and Intertech
Can any of the company-specific risk be diversified away by investing in both New Perspective and Intertech 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 New Perspective and Intertech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Perspective Fund and Intertech SA Inter, you can compare the effects of market volatilities on New Perspective and Intertech 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 New Perspective with a short position of Intertech. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Perspective and Intertech.
Diversification Opportunities for New Perspective and Intertech
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between New and Intertech is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding New Perspective Fund and Intertech SA Inter in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intertech SA Inter and New Perspective 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 New Perspective Fund are associated (or correlated) with Intertech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intertech SA Inter has no effect on the direction of New Perspective i.e., New Perspective and Intertech go up and down completely randomly.
Pair Corralation between New Perspective and Intertech
Assuming the 90 days horizon New Perspective Fund is expected to generate 0.44 times more return on investment than Intertech. However, New Perspective Fund is 2.27 times less risky than Intertech. It trades about 0.26 of its potential returns per unit of risk. Intertech SA Inter is currently generating about 0.03 per unit of risk. If you would invest 6,202 in New Perspective Fund on November 3, 2024 and sell it today you would earn a total of 280.00 from holding New Perspective Fund or generate 4.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
New Perspective Fund vs. Intertech SA Inter
Performance |
| Timeline |
| New Perspective |
| Intertech SA Inter |
New Perspective and Intertech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Perspective and Intertech
The main advantage of trading using opposite New Perspective and Intertech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Perspective position performs unexpectedly, Intertech 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 Intertech will offset losses from the drop in Intertech's long position.| New Perspective vs. Growth Fund Of | New Perspective vs. American Funds Fundamental | New Perspective vs. Investment Of America | New Perspective vs. Smallcap World Fund |
| Intertech vs. Unibios Holdings SA | Intertech vs. Intracom Holdings SA | Intertech vs. Ideal Group SA | Intertech vs. Public Power |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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