Correlation Between Appleseed Fund and Intrepid Capital
Can any of the company-specific risk be diversified away by investing in both Appleseed Fund and Intrepid Capital 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 Appleseed Fund and Intrepid Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Appleseed Fund Appleseed and Intrepid Capital Fund, you can compare the effects of market volatilities on Appleseed Fund and Intrepid Capital 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 Appleseed Fund with a short position of Intrepid Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Appleseed Fund and Intrepid Capital.
Diversification Opportunities for Appleseed Fund and Intrepid Capital
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between APPLESEED and Intrepid is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Appleseed Fund Appleseed and Intrepid Capital Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intrepid Capital and Appleseed Fund 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 Appleseed Fund Appleseed are associated (or correlated) with Intrepid Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intrepid Capital has no effect on the direction of Appleseed Fund i.e., Appleseed Fund and Intrepid Capital go up and down completely randomly.
Pair Corralation between Appleseed Fund and Intrepid Capital
Assuming the 90 days horizon Appleseed Fund Appleseed is expected to generate 0.95 times more return on investment than Intrepid Capital. However, Appleseed Fund Appleseed is 1.05 times less risky than Intrepid Capital. It trades about 0.49 of its potential returns per unit of risk. Intrepid Capital Fund is currently generating about 0.11 per unit of risk. If you would invest 1,410 in Appleseed Fund Appleseed on October 26, 2024 and sell it today you would earn a total of 62.00 from holding Appleseed Fund Appleseed or generate 4.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Appleseed Fund Appleseed vs. Intrepid Capital Fund
Performance |
| Timeline |
| Appleseed Fund Appleseed |
| Intrepid Capital |
Appleseed Fund and Intrepid Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Appleseed Fund and Intrepid Capital
The main advantage of trading using opposite Appleseed Fund and Intrepid Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Appleseed Fund position performs unexpectedly, Intrepid Capital 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 Intrepid Capital will offset losses from the drop in Intrepid Capital's long position.| Appleseed Fund vs. Portfolio 21 Global | Appleseed Fund vs. Parnassus Endeavor Fund | Appleseed Fund vs. Matthews Asia Dividend |
| Intrepid Capital vs. James Balanced Golden | Intrepid Capital vs. Greenspring Fund Retail | Intrepid Capital vs. Berwyn Income Fund | Intrepid Capital vs. Villere Balanced Fund |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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