Correlation Between Appleseed Fund and Walden Equity
Can any of the company-specific risk be diversified away by investing in both Appleseed Fund and Walden Equity 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 Walden Equity 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 Walden Equity Fund, you can compare the effects of market volatilities on Appleseed Fund and Walden Equity 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 Walden Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Appleseed Fund and Walden Equity.
Diversification Opportunities for Appleseed Fund and Walden Equity
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Appleseed and Walden is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Appleseed Fund Appleseed and Walden Equity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walden Equity 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 Walden Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walden Equity has no effect on the direction of Appleseed Fund i.e., Appleseed Fund and Walden Equity go up and down completely randomly.
Pair Corralation between Appleseed Fund and Walden Equity
Assuming the 90 days horizon Appleseed Fund Appleseed is expected to generate 1.11 times more return on investment than Walden Equity. However, Appleseed Fund is 1.11 times more volatile than Walden Equity Fund. It trades about 0.04 of its potential returns per unit of risk. Walden Equity Fund is currently generating about -0.13 per unit of risk. If you would invest 1,424 in Appleseed Fund Appleseed on December 12, 2024 and sell it today you would earn a total of 18.00 from holding Appleseed Fund Appleseed or generate 1.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Appleseed Fund Appleseed vs. Walden Equity Fund
Performance |
| Timeline |
| Appleseed Fund Appleseed |
| Walden Equity |
Appleseed Fund and Walden Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Appleseed Fund and Walden Equity
The main advantage of trading using opposite Appleseed Fund and Walden Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Appleseed Fund position performs unexpectedly, Walden Equity 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 Walden Equity will offset losses from the drop in Walden Equity's long position.| Appleseed Fund vs. Portfolio 21 Global | ||
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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