Correlation Between Aristotle Value and Aristotle Funds
Can any of the company-specific risk be diversified away by investing in both Aristotle Value and Aristotle Funds 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 Value and Aristotle Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aristotle Value Equity and Aristotle Funds Series, you can compare the effects of market volatilities on Aristotle Value and Aristotle Funds 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 Value with a short position of Aristotle Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aristotle Value and Aristotle Funds.
Diversification Opportunities for Aristotle Value and Aristotle Funds
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aristotle and Aristotle is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Aristotle Value Equity and Aristotle Funds Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aristotle Funds Series and Aristotle Value 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 Value Equity are associated (or correlated) with Aristotle Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aristotle Funds Series has no effect on the direction of Aristotle Value i.e., Aristotle Value and Aristotle Funds go up and down completely randomly.
Pair Corralation between Aristotle Value and Aristotle Funds
Assuming the 90 days horizon Aristotle Value is expected to generate 2.19 times less return on investment than Aristotle Funds. But when comparing it to its historical volatility, Aristotle Value Equity is 1.64 times less risky than Aristotle Funds. It trades about 0.19 of its potential returns per unit of risk. Aristotle Funds Series is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 748.00 in Aristotle Funds Series on August 30, 2024 and sell it today you would earn a total of 58.00 from holding Aristotle Funds Series or generate 7.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aristotle Value Equity vs. Aristotle Funds Series
Performance |
| Timeline |
| Aristotle Value Equity |
| Aristotle Funds Series |
Aristotle Value and Aristotle Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aristotle Value and Aristotle Funds
The main advantage of trading using opposite Aristotle Value and Aristotle Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aristotle Value position performs unexpectedly, Aristotle Funds 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 Funds will offset losses from the drop in Aristotle Funds' long position.| Aristotle Value vs. Vanguard Total Stock | Aristotle Value vs. Vanguard 500 Index | Aristotle Value vs. Vanguard Total Stock | Aristotle Value vs. Vanguard Total Stock |
| Aristotle Funds vs. Virtus Real Estate | Aristotle Funds vs. Forum Real Estate | Aristotle Funds vs. John Hancock Variable | Aristotle Funds vs. Teachers Insurance And |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |