Correlation Between Auer Growth and Strategic Allocation
Can any of the company-specific risk be diversified away by investing in both Auer Growth and Strategic Allocation 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 Auer Growth and Strategic Allocation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auer Growth Fund and Strategic Allocation Moderate, you can compare the effects of market volatilities on Auer Growth and Strategic Allocation 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 Auer Growth with a short position of Strategic Allocation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auer Growth and Strategic Allocation.
Diversification Opportunities for Auer Growth and Strategic Allocation
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Auer and Strategic is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Auer Growth Fund and Strategic Allocation Moderate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Allocation and Auer Growth 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 Auer Growth Fund are associated (or correlated) with Strategic Allocation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Allocation has no effect on the direction of Auer Growth i.e., Auer Growth and Strategic Allocation go up and down completely randomly.
Pair Corralation between Auer Growth and Strategic Allocation
Assuming the 90 days horizon Auer Growth Fund is expected to under-perform the Strategic Allocation. In addition to that, Auer Growth is 1.94 times more volatile than Strategic Allocation Moderate. It trades about -0.03 of its total potential returns per unit of risk. Strategic Allocation Moderate is currently generating about 0.07 per unit of volatility. If you would invest 683.00 in Strategic Allocation Moderate on September 12, 2024 and sell it today you would earn a total of 4.00 from holding Strategic Allocation Moderate or generate 0.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auer Growth Fund vs. Strategic Allocation Moderate
Performance |
| Timeline |
| Auer Growth Fund |
| Strategic Allocation |
Auer Growth and Strategic Allocation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auer Growth and Strategic Allocation
The main advantage of trading using opposite Auer Growth and Strategic Allocation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auer Growth position performs unexpectedly, Strategic Allocation 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 Strategic Allocation will offset losses from the drop in Strategic Allocation's long position.| Auer Growth vs. Lebenthal Lisanti Small | Auer Growth vs. Hodges Small Cap | Auer Growth vs. Schwartz Value Focused | Auer Growth vs. Oberweis Small Cap Opportunities |
| Strategic Allocation vs. Volumetric Fund Volumetric | Strategic Allocation vs. Century Small Cap | Strategic Allocation vs. Ab Small Cap | Strategic Allocation vs. Auer Growth 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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