Correlation Between Aristotle Funds and Aristotle Value
Can any of the company-specific risk be diversified away by investing in both Aristotle Funds and Aristotle Value 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 Aristotle Funds and Aristotle Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aristotle Funds Series and Aristotle Value Equity, you can compare the effects of market volatilities on Aristotle Funds and Aristotle Value 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 Aristotle Funds with a short position of Aristotle Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aristotle Funds and Aristotle Value.
Diversification Opportunities for Aristotle Funds and Aristotle Value
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aristotle and Aristotle is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Aristotle Funds Series and Aristotle Value Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aristotle Value Equity and Aristotle Funds 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 Aristotle Funds Series are associated (or correlated) with Aristotle Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aristotle Value Equity has no effect on the direction of Aristotle Funds i.e., Aristotle Funds and Aristotle Value go up and down completely randomly.
Pair Corralation between Aristotle Funds and Aristotle Value
Assuming the 90 days horizon Aristotle Funds Series is expected to generate 1.26 times more return on investment than Aristotle Value. However, Aristotle Funds is 1.26 times more volatile than Aristotle Value Equity. It trades about 0.11 of its potential returns per unit of risk. Aristotle Value Equity is currently generating about 0.1 per unit of risk. If you would invest 1,285 in Aristotle Funds Series on September 1, 2024 and sell it today you would earn a total of 170.00 from holding Aristotle Funds Series or generate 13.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aristotle Funds Series vs. Aristotle Value Equity
Performance |
| Timeline |
| Aristotle Funds Series |
| Aristotle Value Equity |
Aristotle Funds and Aristotle Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aristotle Funds and Aristotle Value
The main advantage of trading using opposite Aristotle Funds and Aristotle Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aristotle Funds position performs unexpectedly, Aristotle Value 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 Aristotle Value will offset losses from the drop in Aristotle Value's long position.| Aristotle Funds vs. Western Asset Municipal | Aristotle Funds vs. Volumetric Fund Volumetric | Aristotle Funds vs. Qs Large Cap | Aristotle Funds vs. Bbh Partner 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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