Correlation Between Aam/himco Short and Scharf Global
Can any of the company-specific risk be diversified away by investing in both Aam/himco Short and Scharf Global 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 Aam/himco Short and Scharf Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aamhimco Short Duration and Scharf Global Opportunity, you can compare the effects of market volatilities on Aam/himco Short and Scharf Global 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 Aam/himco Short with a short position of Scharf Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aam/himco Short and Scharf Global.
Diversification Opportunities for Aam/himco Short and Scharf Global
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aam/himco and Scharf is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Aamhimco Short Duration and Scharf Global Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scharf Global Opportunity and Aam/himco Short 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 Aamhimco Short Duration are associated (or correlated) with Scharf Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scharf Global Opportunity has no effect on the direction of Aam/himco Short i.e., Aam/himco Short and Scharf Global go up and down completely randomly.
Pair Corralation between Aam/himco Short and Scharf Global
Assuming the 90 days horizon Aamhimco Short Duration is expected to generate 0.14 times more return on investment than Scharf Global. However, Aamhimco Short Duration is 7.05 times less risky than Scharf Global. It trades about -0.13 of its potential returns per unit of risk. Scharf Global Opportunity is currently generating about -0.3 per unit of risk. If you would invest 1,003 in Aamhimco Short Duration on October 12, 2024 and sell it today you would lose (3.00) from holding Aamhimco Short Duration or give up 0.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aamhimco Short Duration vs. Scharf Global Opportunity
Performance |
| Timeline |
| Aamhimco Short Duration |
| Scharf Global Opportunity |
Aam/himco Short and Scharf Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aam/himco Short and Scharf Global
The main advantage of trading using opposite Aam/himco Short and Scharf Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aam/himco Short position performs unexpectedly, Scharf Global 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 Scharf Global will offset losses from the drop in Scharf Global's long position.| Aam/himco Short vs. Prudential Health Sciences | Aam/himco Short vs. The Hartford Healthcare | Aam/himco Short vs. Baron Health Care | Aam/himco Short vs. Hartford Healthcare Hls |
| Scharf Global vs. Alpine Ultra Short | Scharf Global vs. Leader Short Term Bond | Scharf Global vs. Rbc Short Duration | Scharf Global vs. Aamhimco Short Duration |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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