Correlation Between New Perspective and Sino AG
Can any of the company-specific risk be diversified away by investing in both New Perspective and Sino AG 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 Sino AG 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 Sino AG, you can compare the effects of market volatilities on New Perspective and Sino AG 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 Sino AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Perspective and Sino AG.
Diversification Opportunities for New Perspective and Sino AG
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between New and Sino is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding New Perspective Fund and Sino AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sino AG 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 Sino AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sino AG has no effect on the direction of New Perspective i.e., New Perspective and Sino AG go up and down completely randomly.
Pair Corralation between New Perspective and Sino AG
Assuming the 90 days horizon New Perspective is expected to generate 54.54 times less return on investment than Sino AG. But when comparing it to its historical volatility, New Perspective Fund is 4.68 times less risky than Sino AG. It trades about 0.05 of its potential returns per unit of risk. Sino AG is currently generating about 0.54 of returns per unit of risk over similar time horizon. If you would invest 6,100 in Sino AG on October 23, 2024 and sell it today you would earn a total of 2,100 from holding Sino AG or generate 34.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 88.89% |
| Values | Daily Returns |
New Perspective Fund vs. Sino AG
Performance |
| Timeline |
| New Perspective |
| Sino AG |
New Perspective and Sino AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Perspective and Sino AG
The main advantage of trading using opposite New Perspective and Sino AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Perspective position performs unexpectedly, Sino AG 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 Sino AG will offset losses from the drop in Sino AG'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 |
| Capital Income vs. Sino AG | ||
| Visa vs. Sino AG | ||
| Salesforce vs. Sino AG | ||
| Growth Fund vs. Sino AG | ||
| New Perspective vs. Sino AG | ||
| Ford vs. Sino AG | ||
| Citigroup vs. Sino AG | ||
| GM vs. Sino AG | ||
| Washington Mutual vs. Sino AG |
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Sino AG as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Sino AG's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Sino AG's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Sino AG.
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |