Correlation Between New Perspective and Southwestern
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By analyzing existing cross correlation between New Perspective Fund and Southwestern Energy 495, you can compare the effects of market volatilities on New Perspective and Southwestern 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 Southwestern. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Perspective and Southwestern.
Diversification Opportunities for New Perspective and Southwestern
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between New and Southwestern is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding New Perspective Fund and Southwestern Energy 495 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southwestern Energy 495 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 Southwestern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southwestern Energy 495 has no effect on the direction of New Perspective i.e., New Perspective and Southwestern go up and down completely randomly.
Pair Corralation between New Perspective and Southwestern
Assuming the 90 days horizon New Perspective Fund is expected to generate 1.34 times more return on investment than Southwestern. However, New Perspective is 1.34 times more volatile than Southwestern Energy 495. It trades about 0.05 of its potential returns per unit of risk. Southwestern Energy 495 is currently generating about -0.14 per unit of risk. If you would invest 6,302 in New Perspective Fund on October 23, 2024 and sell it today you would earn a total of 37.00 from holding New Perspective Fund or generate 0.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 88.89% |
| Values | Daily Returns |
New Perspective Fund vs. Southwestern Energy 495
Performance |
| Timeline |
| New Perspective |
| Southwestern Energy 495 |
New Perspective and Southwestern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Perspective and Southwestern
The main advantage of trading using opposite New Perspective and Southwestern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Perspective position performs unexpectedly, Southwestern 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 Southwestern will offset losses from the drop in Southwestern'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 |
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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